2011 (7) TMI 616 - AT - Service Tax

Input service credit on GTA service for outward transportation of the goods - Revenue denied credit on ground that sale is taken place at the factory gate - Held that - High Court in the case of ABB Ltd (2011 (3) TMI 248 (HC)) held that prior to 1.4.2008 wherein an amendment has taken place relating to place of removal by inserting the word upto in place of word from in clause (ii) of Rule 2(1) if the manufacturer has availed the GTA service and paid service charges the appellants are entitled to input service credit. In this case it is not in dispute that the appellants borne the GTA service charges therefore appellants are entitled to input service credit on GTA service - Decided in favor of assessee.

Summary

Issues Involved:
Entitlement to input service credit on GTA service.

Analysis:
The main issue in this case revolves around the entitlement of the appellants to input service credit on GTA service. The Respondent argued that since the sale took place at the factory gate, the appellants are not eligible for input service credit for outward transportation of goods. The Respondent relied on the decision of Roop Polymers Ltd. vs. CCE, Gurgaon and Board's Circular No.97/8/2007-ST. However, after hearing the Respondent and examining the records, it was determined that the crucial question is whether the appellants are entitled to input service credit for outward transportation of goods. Reference was made to the case of ABB Ltd. where the Karnataka High Court clarified the applicability of the expression 'place of removal' and the relevant amendments. The High Court's decision highlighted that transportation charges incurred by the manufacturer for the clearance of final products from the place of removal were included in the definition of 'input service' before 1.4.2008. Therefore, prior to this amendment, if the manufacturer availed GTA service and paid service charges, they were entitled to input service credit. It was noted that the appellants had borne the GTA service charges in this case, and the decision cited by the Respondent was deemed inapplicable. Following the judicial discipline, the Tribunal upheld that the appellants are indeed entitled to input service credit on GTA service, setting aside the impugned orders and allowing the appeals with consequential relief, if any.