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Sending Samples to Buyers is a Promotional Activity, can’t be treated as Outward Transportation

In Poddar Pigments vs CCE, Jaipur, the Delhi bench of the Customs, Excise and Services Tax Appellate Tribunal ( CESTAT ) has held that sending of samples to buyers is a Promotional Activity which cannot be treated as outward transportation for the purpose of allowing Cenvat credit. 

In the instant case, the assessee availed Cenvat credit of service tax paid on courier services, which stand utilised by the appellant for despatch of samples of their final product to their prospective customers. 

The original adjudicating authority allowed such credit but on appeal by the Revenue, Commissioner (Appeals) reversed the order by observing that such courier services are nothing but outward transportation of the goods and since factory gate is the starting point of such outward transportation, the credit could not be available to the assessee.

Article referred: http://www.taxscan.in/sending-samples-buyers-promotional-activity-outward-transportation-cestat/25072/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+Taxscan+%28Top+Stories+%E2%80%93+Taxscan+%7C+Simplifying+Tax+Laws%29

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