2016 (7) TMI 1390 - AT - Central Excise

CENVAT credit - input services - GTA service for transportation of finished goods from depot to the customer premises - freight charges on auction service - Held that - With regard to availment of Cenvat credit on GTA service, the issue is squarely covered by the Larger Bench of this Tribunal in the case of ABB Ltd. Vs. CCEST, Bangalore 2009 (5) TMI 48 - CESTAT, BANGALORE , where it was held that services availed by a manufacturer for outward transportation of final products from the place of removal be treated as an input service in terms of Rule 2(1)(ii) of the CENVAT Credit Rules, 2004 and thereby enabling the manufacturer to take credit of the service tax paid on the value of such services - credit allowed. Auction service - Held that - auction service is entitled for availment of Cenvat credit - credit allowed. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Denial of Cenvat credit on GTA service for transportation of finished goods from depot to customer premises and freight charges on auction service.

Analysis:
The issues in this appeal pertain to the denial of Cenvat credit on GTA service and freight charges on auction service. The denial was based on the argument that these services did not meet the definition of input services under Rule 2(l) of the Cenvat Credit Rules, 2004.

Regarding the Cenvat credit on GTA service, the Tribunal referred to the case of ABB Ltd. Vs. CCEST, Bangalore, where it was established that transportation up to the place of removal is not available as credit. However, transportation within a factory would be covered. The Tribunal clarified that if the depot is the place of removal, freight from the depot to the customer's premises would be covered. Similarly, if the factory is the place of removal, freight from the factory to the customer's premises would also be covered. This interpretation was crucial in determining the eligibility of Cenvat credit on GTA service for transportation of finished goods.

In the case of freight on auction service, the Tribunal had previously ruled in favor of the appellant in a separate judgment, allowing the appeal and confirming that auction service is indeed eligible for Cenvat credit.

Based on the established legal principles and precedents, the Tribunal found no merit in the impugned order denying the Cenvat credit on GTA service and freight charges on auction service. Consequently, the appeal was allowed in favor of the appellant, emphasizing the settled position of law in this matter.