2015 (11) TMI 1250 - AT - Service Tax

Denial of CENVAT Credit - GTA service - Held that - Tribunal on the identical issue in the case of Kohinoor Biscuit Products (2015 (6) TMI 126 - CESTAT NEW DELHI) held that goods cleared from the job worker premises to the principal manufacturers depot and the cenvat credit on the service tax paid on the GTA services availed for transportation of the goods from the factory to the manufacturer to the depot of the Parle Biscuits has been correctly denied and cenvat credit demand has been upheld alongwith interest - respondent is not eligible to avail cenvat credit on GTA Services in respect of the supply of finished goods on the depots, cannot be treated as place of removal for the manufacturer, unless the sales are on FOR destination basis and the demand would be quantified accordingly - Appeal disposed of.

Summary

Issues:
Admissibility of cenvat credit for payment of Service Tax on Outward and Inward Freight GTA Service during April 2005 - November 2005.

Analysis:
The judgment pertains to a case where the respondent, a job worker engaged in the manufacture of Biscuits, disputed the admissibility of cenvat credit for Service Tax on Outward and Inward Freight GTA Service. The Adjudicating Authority initially confirmed the demand for cenvat credit along with interest and imposed a penalty. However, the Commissioner (Appeals) later set aside the adjudication order and allowed the appeal filed by the respondent.

The Learned Authorised Representative for the Revenue argued that the decision of the Larger Bench of the Tribunal in a specific case was not applicable as the respondent was a job worker. He contended that the definition of the input service "upto the place of removal" would only apply to the manufacturer. The Representative relied on the decision of the Hon'ble Supreme Court in a particular case and a Tribunal decision upheld by the Hon'ble Allahabad High Court.

The Tribunal, in a previous case concerning a similar issue, ruled that the respondent was not eligible to avail cenvat credit on GTA Services for the supply of finished goods to the depots, as it did not constitute a "place of removal" for the manufacturer. The judgment modified the impugned order to reflect this stance, stating that the demand for cenvat credit would be quantified accordingly. Consequently, the appeal filed by the Revenue was disposed of based on these terms.

In conclusion, the judgment clarifies the ineligibility of the respondent to avail cenvat credit on GTA Services in relation to the supply of finished goods to depots, emphasizing the significance of the "place of removal" concept in determining cenvat credit eligibility for manufacturers and job workers.