2011 (7) TMI 613 - AT - Service Tax

GTA service - input service credit on GTA service availed by the appellants for outward transportation of finished goods upto port - Revenue contended that input service credit is entitled to the appellants if the assessee has availed services in the course of their business of manufacturing as well as post manufacture, the service has formed part of the assessable value of the goods cleared by them - Held that - In the case of ABB Ltd (2011 - TMI - 203985 - KARNATAKA HIGH COURT)it has been held that the assessee is entitled to avail input service credit on outward transportation of the goods as in this case there is no dispute that the post manufacture has not formed the part of the assessable value. It is also not disputed this has not been availed by the appellants in the course of business manufacturing. Therefore, the appellants are entitled to avail input service credit on GTA service - Decided in favor of assessee

Summary

Issues:
- Availment of input service credit on GTA service for outward transportation of finished goods up to port.

Analysis:
The appellants appealed against an order demanding input service credit for GTA service used in transporting finished goods to the port. The appellant's advocate referred to a judgment by the Hon'ble Karnataka High Court in the case of ABB Ltd., stating that input service credit for outward transportation of finished goods is permissible. On the contrary, the respondent's representative mentioned that the decision in ABB Limited's case is under review by the legal department and may be challenged further. The respondent argued against granting input service credit for GTA service. After hearing both parties, the judge considered the decision of the Hon'ble Bombay High Court in the case of CCE, Nagpur vs. Ultratech Cement Ltd. The judge noted that input service credit is allowable if the services are used in the manufacturing process and are part of the assessable value of cleared goods. The judge emphasized that in the ABB Ltd. case, the transportation of goods did not form part of the assessable value, and it was not disputed that the service was not utilized in the manufacturing process. Therefore, the appellants were deemed eligible for input service credit on GTA service as per the ABB Ltd. judgment. The judge dismissed the argument raised by the respondent regarding the legal department's review of the ABB Ltd. decision, stating that no action had been taken by the department to challenge the judgment. The judge concluded by allowing the appeals and granting consequential relief if necessary.