2011 (9) TMI 152 - AT - Service Tax

CENVAT Credit of Service Tax- GTA service - Credit of Service Tax paid on GTA service during the period March 2007 to March 2008 has been denied on the ground that the definition of input service does not cover the Service Tax paid on GTA service after removal of the goods from the factory- as such the issue has already been decided by Larger Bench in the case of ABB Limited - (2009 -TMI - 34139 - CESTAT, BANGALORE) - Hon ble High Court of Karnataka has upheld the view taken by Larger Bench (2011 -TMI - 203985 - KARNATAKA HIGH COURT)- Hon ble High Court of Karnataka has held that upto 31.03.08, the credit of Service Tax paid on GTA service would be admissible from the place of removal in respect of transportation of goods - amendment 1.4.08, replacing the words from the place of removal by upto the place of removal , cannot be read to have retrospective effect - appellant is eligible for credit on Service Tax paid and allow the appeal - - decided in favor of assessee

Summary

Issues:
- Denial of CENVAT Credit for Service Tax paid on GTA service after goods removal from the factory.

Analysis:
The judgment addresses the denial of CENVAT Credit for Service Tax paid on GTA service from March 2007 to March 2008. The issue revolves around whether the definition of input service covers Service Tax paid on GTA service post goods removal from the factory. The appellant did not appear, but a letter submitted by Advocate Shri Willigdon Christian referenced the decision of a Larger Bench in the case of ABB Limited and judgments from the High Courts of Gujarat and Karnataka. The High Court of Karnataka held that until 31.03.08, credit for Service Tax on GTA service was admissible from the place of removal for transportation of goods. The High Court also noted that the amendment on 1.4.08 did not have a retrospective effect. The central issue is the admissibility of Service Tax paid on GTA service for transportation of finished goods from the place of removal, a matter supported by the cited decisions.

The judgment, in line with precedent decisions, concludes that the appellant is entitled to credit for Service Tax paid on GTA service. The decision emphasizes that the appellant meets the criteria for eligibility, thereby allowing the appeal. The ruling is a significant legal interpretation that clarifies the applicability of CENVAT Credit for Service Tax paid on GTA service, especially post goods removal from the factory. The judgment provides a clear direction based on established legal principles and previous decisions, ensuring consistency and adherence to legal precedents in matters concerning taxation and credit eligibility.