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2011 (7) TMI 615 - AT - Service TaxInput service credit on GTA service for outward transportation of the goods - Revenue denied credit on ground that such service is not covered under the definition of input service as per Rule 2(l) of Cenvat Credit Rules 2004 - Held that - This issue has been settled by High Court in the case of ABB Ltd (2011 (3) TMI 248 (HC)) wherein it has been held that the input service credit on outward transportation of the goods is available as the same has formed part of the assessable value. Therefore appellants are entitled to input service credit on GTA service - Decided in favor of assessee.
Issues:
- Denial of input service credit on GTA service under Rule 2(l) of Cenvat Credit Rules, 2004. Analysis: The case involved the denial of input service credit to the appellants for GTA service, contending that such service did not fall within the definition of input service as per Rule 2(l) of Cenvat Credit Rules, 2004. The Respondent argued that the appellants were not entitled to input service credit for outward transportation of goods, as it was considered an expenditure related to manufacturing goods sold on FOR basis and at the factory gate. The Respondent reiterated the impugned order, emphasizing the ineligibility of input service credit on GTA service. Upon examination of the show cause notice and considering the arguments presented, the Judge noted the settled position on the matter. Referring to a judgment by the Hon'ble Karnataka High Court in the case of ABB Ltd., where it was held that input service credit on outward transportation of goods is permissible as it forms part of the assessable value. Drawing from this precedent, the Judge concluded that the service provided by GTA was indeed covered by the decision of the Hon'ble Karnataka High Court in the case of ABB Ltd. Consequently, the appellants were deemed entitled to input service credit on GTA service. The appeal was allowed, setting aside the impugned order and providing any consequential relief deemed necessary.
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