2012 (6) TMI 743 - AT - Central Excise

CENVAT Credit - GTA Services - Held that - Following decision of Commissioner of C. Ex. & S.T., LTU, Bangalore vs. ABB Limited 2011 (3) TMI 248 - KARNATAKA HIGH COURT - Decided against Revenue.

Summary

Issues:
Whether the respondent was entitled to take CENVAT credit of the service tax paid on GTA service for outward transportation of final products from January to May 2005.

Analysis:
The appeal filed by the department questioned the entitlement of the respondent to claim CENVAT credit on the service tax paid on GTA service used for transporting final products. Despite no representation from the respondent, the Tribunal considered the matter. The original authority disallowed the CENVAT credit and demanded repayment along with interest. However, the Commissioner (Appeals) allowed the appeal, recognizing GTA service as an input service under the CENVAT Credit Rules, 2004. The department's appeal challenged this decision.

The Tribunal referred to a previous judgment by the Hon'ble High Court of Karnataka in a similar case, where it was held that manufacturers could claim CENVAT credit on service tax paid for GTA service used in transporting goods to customers' premises. This precedent favored the respondent's position, leading to the rejection of the department's appeal seeking to deny CENVAT credit for the period in question (January to May 2005). The Tribunal concluded that the respondent was indeed entitled to take CENVAT credit on the service tax paid for the GTA service during the specified period. The decision was pronounced and dictated in the open court, upholding the entitlement of the respondent to the CENVAT credit.