No outward transportation credit where goods cleared FOR directly to customer’s premises

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CESTAT disallows CENVAT credit of outward transportation services despite inclusion of cost thereof in assessable value of finished goods.

It notes that assessee(i.e cement manufacturer) was clearing goods on FOR basis from factory gate direct to customers at their place, and including the transportation cost in assessable value.

Concurs with Revenue that the issue has been settled by Apex Court in assessee’s own case wherein it has been held that post April 1, 2008, assessee is not entitled to avail credit of outward transportation service used beyond place of removal to buyer’s premises.

Accordingly, rejects assessee’s reliance on rulings in Maruti Suzuki Ltd, Coca Cola India, and Stanzen Toyotetsu India (P) Ltd that held that when transportation cost has been added to assessable value, CENVAT credit is available being business expenditure in course of manufacturing activity.

However, sets aside penalty in light of divergent views during the impugned period : Chandigarh CESTAT

Citation: [TS-258-CESTAT-2018-EXC]