CESTAT provides succor to Bata India

CESTAT provides succor to Bata India

It has remanded back the matter of Cenvat credit on transportation of footwear

In partial relief to Bata India, The Chennai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has provided partial relief to Bata India. It has remanded back the issue of denial of the Central Value Added Tax (CENVAT) credit on transportation of footwear from its corporate office to retail outlets.

The appellant submitted that the adjudicating authority had misdirected in denying the Cenvat credit. Also, the commissioner had neither reviewed the facts of the case nor examined it from the perspective of the directions of the High Court.

In view of the amended Cenvat Credit Rules, 2004, provisions, the 'place of removal' was the place from where the goods were sold after their clearance from the factory. In this case, the goods manufactured in the factory were stock-transferred to their research data centres located at Faridabad, Kolkata, Bangalore and Thane. Thereafter, the goods were again transferred to their retail outlets. Until that stage, no sale took place.

The appellant submitted that the transfer of possession would take place only at the retail outlets, which was the first point of sale. Hence, the other locations should be regarded as the place of removal.

The Coram of the judicial member, P Dinesha noted that though there was an observation in the impugned orders that the manufacturing activities would cease as soon as the goods were transported to the centres/corporate office, there was no evidence that any sale took place at those places.

The CESTAT directed, "I set aside the impugned orders and remand the matter back to the file of the adjudicating authority, who shall examine the issue afresh."