2013 (2) TMI 461 - AT - Service Tax

Cenvat Credit of Service Tax paid on GTA services - outward freight for direct sales to customers and freight for transportation of goods to their depots treating the same as input service in terms of Rule 2 (l) CCR 2004 - period from January, 2005 to June, 2006 - Held that - Issue regarding availment of CENVAT Credit on outward freight for the period prior to 01.04.2008 has been settled by in the case of ABB Ltd. (2011 (3) TMI 248 - KARNATAKA HIGH COURT) in favour of assessee

Summary

Issues:
1. Availment of Cenvat Credit on GTA services for outward freight.
2. Interpretation of the judgment by the Hon'ble High Court of Karnataka.
3. Appeal against the judgment by the Department.

Analysis:
1. The appeal was filed against the order passed by the Commissioner (Appeals) regarding the denial of Cenvat Credit on GTA services for the period from January 2005 to June 2006. The appellant had availed Cenvat Credit on service tax paid for outward freight related to direct sales to customers and transportation of goods to their depots. Show Cause notices were issued proposing denial of Cenvat Credit, leading to confirmation of demand and imposition of penalties. The Commissioner (Appeals) allowed the Cenvat Credit for outward freight to their depots but rejected the credit for transporting goods from the factory to customers' premises. The appellant challenged this decision.

2. The appellant's advocate referred to the judgment of the Hon'ble High Court of Karnataka in the case of ABB Ltd., which settled the issue of eligibility for Cenvat Credit on service tax paid on GTA services as input service prior to 1/4/08. The Advocate argued that this issue was no longer open for debate based on the High Court's decision.

3. The Department, represented by the A.R., mentioned that an appeal had been filed against the High Court's judgment at the Apex Court. However, it was noted that no stay had been granted by the Apex Court regarding the High Court's decision. After considering the submissions from both sides and reviewing the records, the Tribunal found that the High Court's judgment in the ABB Ltd. case had settled the matter in favor of the assessee. The Tribunal cited the High Court's ruling and set aside the Commissioner (Appeals)'s order regarding the denial of Cenvat Credit on GTA services for outward freight. Consequently, the appeal by the Appellant was allowed in this regard, and the impugned order was overturned.

In conclusion, the Tribunal disposed of the appeal in favor of the Appellant based on the settled interpretation of the law by the High Court, allowing the Cenvat Credit on GTA services for outward freight as input service.