2011 (8) TMI 348 - AT - Service Tax

Cenvat credit - whether the CENVAT Credit of Service Tax paid on Outward Transportation of final product during the period November 2006 to June 2007 is admissible under CENVAT Credit Rules, 2004 or otherwise - in view of decision in ABB Ltd. (2011 -TMI - 203985 - KARNATAKA HIGH COURT) on an appeal filed by the Revenue against the decision of the Larger Bench of the Tribunal in the case of ABB Ltd. (2009 -TMI - 34139 - CESTAT, BANGALORE) claim of cenvat credit allowed.

Summary

Issues involved: Admissibility of CENVAT Credit of Service Tax paid on Outward Transportation of final product under CENVAT Credit Rules, 2004.

Analysis:

The issue in this case revolves around the admissibility of CENVAT Credit of Service Tax paid on Outward Transportation of final product between November 2006 to June 2007 under the CENVAT Credit Rules, 2004. The Revenue appealed against the decision of the Commissioner (Appeals), who allowed the credit based on the precedent set by the Large Bench of the Tribunal in the case of ABB Ltd. The respondent did not appear in person but submitted a letter referring to the decision of the Hon'ble High Court of Karnataka in a related matter. The High Court's decision supported the admissibility of the credit for outward transportation services, aligning with the view of the Larger Bench of the Tribunal. The absence of any contradictory higher appellate decisions, coupled with the consistent support for the respondent's position, led to the rejection of the Revenue's appeal.

In essence, the crux of the matter was whether the CENVAT Credit of Service Tax paid on outward transportation services could be availed under the CENVAT Credit Rules, 2004. The Tribunal's decision hinged on the interpretation of whether the input service was utilized in or in relation to the manufacturing process. The reliance on the precedent set by the Larger Bench of the Tribunal in the ABB Ltd. case, further reinforced by the Hon'ble High Court of Karnataka's detailed consideration and affirmation of the admissibility of such credit, formed the basis for rejecting the Revenue's appeal. The consistent legal stance in favor of allowing the credit for outward transportation services, as evidenced by the higher appellate decisions, played a pivotal role in the Tribunal's final ruling.

Ultimately, the Tribunal's decision to dismiss the Revenue's appeal was grounded in the absence of any conflicting higher appellate judgments and the consistent legal support favoring the admissibility of CENVAT Credit for Service Tax paid on outward transportation services. The alignment of the Tribunal's decision with the precedent set by the Larger Bench and the affirmation by the Hon'ble High Court of Karnataka underscored the validity of the respondent's position, leading to the rejection of the Revenue's appeal.