2015 (8) TMI 1400 - AT - Central Excise

CENVAT credit - input services - GTA Service - Whether Service Tax paid on transportation charges for transporting goods from the assessee place such as a factory warehouse depot to the customer falls within the meaning of input service as defined under the Rules and can the assessee be allowed to take Cenvat Credit? - Held that - Under the on amending definition of the input service contained in Rule 2 (I) of the CCR since the requirement for taking CENVAT Credit was with regard to the clearance of final product from the place of removal the question as to how and where the ownership/title of the goods passed on the buyer is not the relevant consideration and irrespective of the purpose if service tax has been paid on the transportation of the goods to the buyers premises have been incurred by the respondent the said should be available at CENVAT Credit. In view of the certain position of law the respondent shall be eligible for the CENVAT benefit of service tax paid on the GTA service for transportation of goods to its buyers premises - appeal dismissed - decided against Revenue.

Summary

Issues involved:
1. Whether Service Tax paid on transportation charges for transporting goods from the assessee place to the customer falls within the meaning of input service for Cenvat Credit.

Detailed Analysis:
The issue in this case revolves around determining whether the Service Tax paid on transportation charges for moving goods from the assessee's location to the customer's destination qualifies as an input service for Cenvat Credit. The appellant argues that the lack of documentation proving the delivery of goods on a Free on Road (FOR) basis means that Cenvat Credit on outward transportation is not available. The respondent's counsel contends that the amendment to Rule 2(l) of the Cenvat Credit Rules in 2008 does not restrict the eligibility for Cenvat Credit based on the place of removal, making the respondent eligible for the credit on GTA service for outward transportation of goods.

The Tribunal's analysis delves into the interpretation of the definition of input service pre-amendment in 2008. It is noted that the clearance of final products from the place of removal was considered an input service for Cenvat Credit. The Tribunal acknowledges that the appellant availed GTA service for transporting goods to the buyer's premises and that the issue at hand is the eligibility of Cenvat benefit based on the pre-amendment definition of input service. Referring to a judgment by the Karnataka High Court, the Tribunal emphasizes that transportation charges for delivering goods to the buyer's premises fall within the definition of input service, including activities like loading, unloading, and transportation.

Moreover, the Tribunal highlights a previous decision in the appellant's case where Cenvat Credit on service tax paid for GTA service was allowed. The Tribunal concludes that the amendment to the definition of input service does not necessitate proving ownership/title transfer of goods to the buyer, making the respondent eligible for Cenvat Credit on GTA service for transporting goods to the buyer's premises. Consequently, the Tribunal dismisses the appeal filed by the Revenue, affirming the respondent's eligibility for Cenvat benefit on service tax paid for transportation services.