2018 (8) TMI 2000 - AT - Central Excise

CENVAT Credit - input services - GTA services - outward transportation charges - period from October 2006 to March 2008 - HELD THAT - The issue is no more res-entigra in view of the decision of the Hon ble Supreme Court in the case of CCE Belgaum vs. Vasavadatta Cements Ltd. 2018 (3) TMI 993 - SUPREME COURT where it was held that input service includes not only the inward transportation of inputs or capital goods but also includes outward transportation of the final product upto the place of removal. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Alleged irregular Cenvat Credit availment
- Interpretation of input service definition
- Tax paid on transportation of final products

Alleged irregular Cenvat Credit availment:
The case involved a manufacturer of Railway Wagons and parts facing a Show Cause Notice for irregular Cenvat Credit availment. The Adjudicating Authority dropped the proceedings, but the Department appealed to the Commissioner (Appeals), resulting in a demand confirmation and penalty imposition. The appellant challenged this decision before the Tribunal, arguing that the issue centered on the sale of a Bailey Bridge to the Government of Tripura, where the price included Service Tax up to the destination point. The appellant claimed that the sale occurred at the destination point, with ownership retained until delivery to the buyer's doorstep. The appellant contended that outward transportation charges were integral to the goods' price.

Interpretation of input service definition:
The Tribunal examined the issue of Cenvat Credit entitlement for GTA Service Tax based on a Board's circular. Referring to a Supreme Court decision, the Tribunal discussed the definition of "input service" concerning services used directly or indirectly in manufacturing final products and their clearance from the place of removal. The Tribunal highlighted the importance of transportation services in this definition and clarified that tax paid on transportation from the place of removal to the first point, whether depot or customer, should be allowed for credit. The Tribunal endorsed the Full Bench of CESTAT's approach, emphasizing the inclusivity of transportation charges in the definition of input service.

Tax paid on transportation of final products:
The Tribunal, following the Supreme Court's precedent, set aside the impugned order, ruling in favor of the appellant. The Tribunal concluded that the tax paid on transportation of final products from the place of removal to the initial point, such as depot or customer, should be eligible for Cenvat Credit. Consequently, the appellant's appeal was allowed with consequential benefits granted.

This detailed analysis of the judgment showcases the Tribunal's thorough examination of the alleged irregular Cenvat Credit availment, the interpretation of the input service definition, and the eligibility of tax paid on transportation of final products for credit, ultimately resulting in a favorable decision for the appellant.