2014 (5) TMI 410 - AT - Central Excise

CENVAT Credit - Whether the respondents are eligible to avail CENVAT credit for the service tax paid on freight for outward transportation from the place of removal during the period January 2005 to June 2007 - after considering the decision of the Larger Bench of the Tribunal in the case of ABB Ltd. (2011 (3) TMI 248 - KARNATAKA HIGH COURT) held that CENVAT credit is eligible on service tax paid on GTA service prior to 1.4.2008. The Hon ble Gujarat High Court 2011 (4) TMI 975 - GUJARAT HIGH COURT is also of the same view. I find that the decisions of the Hon ble Karnataka High Court and Hon ble Gujarat High Court are squarely applicable in the present case. The decision of the Hon ble Calcutta High Court in the case of Vesuvious India Ltd. (2013 (12) TMI 1025 - CALCUTTA HIGH COURT), as relied upon by the learned AR, has only granted temporary stay - Decided against Revenue.

Summary

Issues involved:
Whether the respondents are eligible for CENVAT credit on service tax paid on freight for outward transportation from the place of removal during January 2005 to June 2007.

Analysis:

The Revenue filed an appeal against the Commissioner (Appeals) order that set aside the adjudication order. The issue at hand was the eligibility of the respondents to avail CENVAT credit for service tax paid on freight for outward transportation during a specific period. The Revenue relied on a decision by the Hon'ble Calcutta High Court, while the respondent's counsel cited judgments from the Hon'ble Karnataka High Court and the Hon'ble Gujarat High Court.

The Tribunal noted that the Hon'ble Karnataka High Court, in a case involving ABB Ltd., held that CENVAT credit is permissible on service tax paid on GTA service before April 1, 2008. Similarly, the Hon'ble Gujarat High Court also supported this view. The Tribunal found these decisions directly applicable to the current case. It highlighted that the decision from the Hon'ble Calcutta High Court, as referenced by the Revenue, only granted temporary stay.

Based on the above discussion and following the precedents set by the Hon'ble Karnataka High Court and the Hon'ble Gujarat High Court, the Tribunal found no fault in the Commissioner (Appeals) order. Consequently, the appeal by the Revenue was dismissed, and the respondent's cross-objection was addressed.

This judgment provides a clear analysis of the eligibility of CENVAT credit on service tax paid on freight for outward transportation, referencing relevant decisions from different High Courts to support the final decision reached by the Tribunal.