2013 (6) TMI 452 - AT - Central Excise

Cenvat Credit - GTA Service - Outward transportation - Held that - The period of dispute in the present case is prior to 01/04/2008, the date on which a significant amendment was brought to Rule 2(l)(ii) of the CCR. The Hon ble High Court in CCE & ST, Bangalore vs ABB Ltd. 2011 (3) TMI 248 - KARNATAKA HIGH COURT held that, notwithstanding the Boar s clarification in Circular No.97/8/2007-ST dt. 23/08/2007, transportation of final products from the place of removal stood within the ambit of the definition of input service prior to 01/04/2008. The benefit of the High Court s decision is available to the appellant and therefore the impugned order is set aside and this appeal is allowed.

Summary

Issues: Denial of CENVAT credit on GTA service for outward transportation of finished goods.

Analysis:

1. Denial of CENVAT Credit:
The appeal in this case revolves around the denial of CENVAT credit on GTA service used for outward transportation of finished goods. The appellant contested the demand based on a larger Bench decision in ABB Ltd. vs CCE&ST, Bangalore, where GTA service was accepted as an input service under Rule 2(l) of the CENVAT Credit Rules, 2004. However, the appellate authority did not follow this decision due to a pending appeal before the jurisdictional High Court. The appellant argued that the larger Bench decision was upheld by the High Court in CCE & ST, Bangalore vs ABB Ltd., which the Commissioner acknowledged. The period of dispute is before 01/04/2008, when an amendment was made to Rule 2(l)(ii) of the CCR.

2. Interpretation of Input Service Definition:
The Hon'ble High Court held that transportation of final products from the place of removal fell within the definition of input service before 01/04/2008, despite the Board's clarification in Circular No.97/8/2007-ST. This interpretation benefited the appellant, leading to the setting aside of the impugned order and allowing the appeal. The stay application was also disposed of in light of this decision.

In conclusion, the judgment favored the appellant by allowing the appeal and setting aside the denial of CENVAT credit on GTA service for outward transportation of finished goods. The interpretation of the input service definition by the High Court played a crucial role in this decision, benefiting the appellant based on the period of dispute and relevant legal precedents.