2012 (6) TMI 47 - AT - Service Tax

GTA service - denial of cenvat credit on the ground that TR-6 challan is not proper document to avail cenvat credit and cenvat credit is not admissible on outward goods transportation service Regarding proper document Held that - in the case of Gabriel India Ltd. (1991 (12) TMI 177 (Tri)) that TR-6 is an instrument showing the payment of duty. Therefore, TR-6 challan is a valid document to avail cenvat credit. Therefore, in this case, the appellants are entitled to avail cenvat credit on the strength of TR-6 challan Regarding - input service credit on outward transportation service, Hon ble Karnataka High Court case of ABB Ltd. (2011 (3) TMI 248 (HC)) has held that the assessee is entitled for input service credit on outward transportation of the goods from the place of removal which is an activity of their regular business. appellants are entitled for input service credit on GTA service appeal is allowed

Summary

Issues:
- Denial of cenvat credit based on TR-6 challan validity
- Admissibility of cenvat credit on outward goods transportation service

Analysis:

1. Denial of cenvat credit based on TR-6 challan validity:
The appellants contested the denial of cenvat credit on the grounds that TR-6 challan is a valid document demonstrating payment of duty, making it admissible for availing cenvat credit. They relied on the precedent set by the Tribunal in the case of Gabriel India Ltd. v. Collector of Central Excise 1993 (67) ELT 131. The advocate argued that the appellants rightfully claimed cenvat credit using TR-6 challan. On the contrary, the Revenue represented by Ms. Renu Jagdev contended that prior to 16.6.05, cenvat credit could not be claimed based on TR-6 challan. The Revenue maintained that as the provision allowing cenvat credit on TR-6 challan was introduced post 16.6.05, the lower authorities correctly denied such credit. However, after considering both sides' arguments, the Tribunal upheld that TR-6 challan is indeed a valid document for availing cenvat credit, as established in the case of Gabriel India Ltd.

2. Admissibility of cenvat credit on outward goods transportation service:
The second issue revolved around the admissibility of cenvat credit on outward goods transportation service. The appellants argued that they were entitled to input service credit on outward transportation service, citing the decision in the case of CCE&ST v. ABB Ltd. where the Karnataka High Court ruled in favor of the assessee regarding input service credit on outward transportation from the place of removal. The Revenue raised concerns about the clarity of the appellants' claim for input service credit on GTA service, particularly regarding the ownership of goods and the destination of transportation. Despite these objections, the Tribunal referenced the ABB Ltd. case and concluded that the appellants were indeed entitled to input service credit on outward transportation of goods from the place of removal, which aligned with their regular business activities. The Tribunal emphasized that the payment made for the removal of goods from the factory gate qualified for input service credit, as per the precedent set by the Karnataka High Court in the ABB Ltd. case. Consequently, the impugned order was overturned, and the appeal was allowed in favor of the appellants.