2013 (2) TMI 250 - AT - Central Excise

CENVAT credit on GTA service - Two show-cause notices were issued denying CENVAT credit for the period from January 2005 to August 2009 and another for the period from September 2007 to April 2008 - Held that - For the period prior to 1/4/2008, the appellant can claim the benefit of CENVAT credit on GTA service used by them for outward transportation of final products from the factory to customers premises fully supported by the judgments of ABB Ltd s case 2011 (3) TMI 248 - KARNATAKA HIGH COURT & Parth Poly Wooven Pvt. Ltd s case 2011 (4) TMI 975 - GUJARAT HIGH COURT The law is against the appellant for the period from 1/4/2008 as the definition of input service under Rule 2(l) of the CENVAT Credit Rules 2004 was amended by Notification No. 10/2008 CE (NT) dated 1/3/2008 and, accordingly, with effect from 1/4/2008, the word upto was substituted for the word from preceding the expression the place of removal . In view of this amendment, it has to be held that the appellant cannot claim CENVAT Credit on GTA service used for outward transportation of their final products from the factory (place of removal) - thus challenge against denial of CENVAT credit for the period subsequent to 1/4/2008 fails.

Summary

Issues:
Whether the appellant can claim CENVAT credit on GTA service for outward transportation of final products from January 2005 to April 2008.

Analysis:
1. The appellant faced two show-cause notices denying CENVAT credit on GTA service for different periods, totaling Rs. 54,999. The original authority confirmed the demand and imposed penalties, which were upheld by the appellate authority, leading to the current appeal by the assessee.

2. The appellant's authorized representative cited two High Court decisions in support, while the Dy. Commissioner argued against the acceptance of one judgment by the department. The representative also contended that CENVAT credit for April 2008 could not be claimed based on Rule 2(l) of the CENVAT Credit Rules 2004.

3. The judgment analyzed the situation and concluded that the appellant could claim CENVAT credit for the period before 1/4/2008 based on the High Court decisions. However, post 1/4/2008, due to an amendment in the definition of input service, the appellant was not entitled to claim CENVAT credit on GTA service for outward transportation of final products.

4. The judgment clarified that the amendment to Rule 2(l) of the CENVAT Credit Rules 2004, effective from 1/4/2008, precluded the appellant from claiming CENVAT credit on GTA service beyond that date. The appellant was directed to pay back the credit availed for the period from 1/4/2008, with interest, and a nominal penalty of Rs. 1,000 was imposed. Other penalties were set aside, and the appeal was disposed of accordingly.