2012 (1) TMI 110 - AT - Central Excise

Denial of CENVAT credit - GTA Service - Held that - assessee claimed support inter alia from the Tribunal s Larger Bench decision in ABB Ltd. vs. Commissioner 2009 (5) TMI 48 - CESTAT BANGALORE wherein CENVAT credit on GTA service used in the aforesaid manner by a manufacturer of final product was held to be admissible to them for a period prior to 1.4.2008 the date on which Rule 2(l) of the CENVAT Credit Rules was amended to substitute the word upto for the word from occurring immediately before the phrase place of removal - transportation of final products from factory to the premises of buyers was also covered by the expression from the place of removal used in the text of the definition of input service under Rule 2 (l) prior to its amendment. As the period of dispute in this case is prior to 1.4.2008 the appellant can legitimately claim the benefit of the High Court s judgment - Decided in favour of assessee.

Summary

Issues:
- Denial of CENVAT credit on GTA service for outward transportation of final products.
- Interpretation of Rule 2(l) of CENVAT Credit Rules.
- Applicability of Tribunal's decision in ABB Ltd. vs. Commissioner.
- High Court's interpretation of the definition of input service.

Analysis:
The judgment pertains to the denial of CENVAT credit on GTA service used for outward transportation of final products. The impugned demand of duty of Rs.2,88,139/- was challenged by the appellant, citing the Tribunal's decision in ABB Ltd. vs. Commissioner, which allowed CENVAT credit on GTA service for transportation of final products. The Commissioner (Appeals) did not accept the appellant's contentions, stating that the Tribunal's decision was under challenge before the High Court. However, the appellant later informed that the High Court upheld the Tribunal's view, which the Additional Commissioner acknowledged.

The key issue revolved around the interpretation of Rule 2(l) of the CENVAT Credit Rules. The Hon'ble High Court held that transportation of final products from the factory to buyers' premises fell within the definition of input service under Rule 2(l) before its amendment on 1.4.2008. Therefore, the appellant was entitled to claim the benefit of the High Court's judgment for the disputed period. Consequently, the impugned order denying CENVAT credit was set aside, and the appeal was allowed. The stay application was also disposed of in favor of the appellant.

In conclusion, the judgment clarified the applicability of CENVAT credit on GTA service for outward transportation of final products, emphasizing the interpretation of Rule 2(l) and the relevance of the Tribunal's decision in similar cases. The High Court's ruling played a crucial role in determining the admissibility of CENVAT credit for the appellant, leading to the favorable outcome of setting aside the impugned order and allowing the appeal.