2018 (11) TMI 1707 - AT - Central Excise

CENVAT Credit - input services - Outward Transportation of their final product i.e., from the place of removal to their customer s premises - period involved is prior to March, 2008 - amendment in the definition of input services - HELD THAT - The issue is no more res-integra and stands settled by the Hon ble Supreme Court s latest decision in the case of Commissioner of Central Excise, Belgaum vs. Vasavadatta Cements Ltd., 2018 (3) TMI 993 - SUPREME COURT . It stands held by the Hon ble Supreme Court that such GTA Services utilized for outward transportation of the manufactured product would be cenvetable input services for the period pre 01.04.2008 when the expressions were changed to upto the place of removal . As we have already held in favour of the assessee they are entitled to avail the credit of the same in their cenvat credit account by reversing the debit entry, made by them. The interest angle involved, if any, would be re-examined by the Lower Adjudicating Authority - appeal disposed off.

Summary

Issues:
1. Entitlement to Cenvat Credit of Service Tax paid on outward transportation of final product
2. Interpretation of input services definition pre-March 2008

Entitlement to Cenvat Credit of Service Tax on Outward Transportation:
The appeal concerned whether the appellant is entitled to Cenvat Credit of Service Tax paid on outward transportation of their final product to customer premises. The appellant, engaged in manufacturing precipitated calcium carbonate, had availed Cenvat Credit of duty paid on various inputs. The dispute arose as the Lower Authorities rejected the appellant's refund claim for Service Tax paid on outward transportation, deeming it not an input service. However, citing a recent Supreme Court decision in Commissioner of Central Excise vs. Vasavadatta Cements Ltd., it was established that GTA Services for outward transportation of manufactured products were indeed cenvatable input services pre-01.04.2008, when the definition included "from the place of removal." Consequently, the legal issue was resolved in favor of the assessee, allowing them to avail the credit by reversing the earlier debit entry made during investigation/adjudication.

Interpretation of Input Services Definition Pre-March 2008:
The key legal issue revolved around the interpretation of the input services definition before March 2008, specifically regarding outward transportation. The Tribunal referenced the Supreme Court's decision to clarify that GTA Services for outward transportation were considered cenvatable input services under the previous definition. This clarification enabled the assessee to reverse the earlier debit entry and claim the credit without the need for an examination of unjust enrichment, as it was not an ordinary refund under Section 11B of the Central Excise Act. The Tribunal directed the Lower Adjudicating Authority to re-examine any interest angle involved, ultimately disposing of the appeal in favor of the assessee.