2009 (1) TMI 143 - AT - Service Tax

Credit of tax on GTA service for outward transportation of goods to branches and buyer s premises - primary issue that is determination of place of removal has not been made by both the sides - In terms of Circular No. 97/8/2007also credit would be admissible if the price is inclusive of transportation cost up to the place of removal. This aspect has not been considered at all. - Matter is remanded to decide the place of removal in respect of different types of transactions and decide the admissibility of CENVAT credit

Summary

Issues:
1. Eligibility of CENVAT credit for service tax paid on outward transportation services.
2. Determination of the place of removal for the purpose of availing CENVAT credit.

Issue 1:
The judgment addresses the eligibility of CENVAT credit for service tax paid on outward transportation services. The Appellant argued that they are entitled to take service tax credit for transportation up to the place of removal, citing the case of Gujarat Ambuja Cements Ltd. The Tribunal emphasized that the determination of the place of removal is crucial. The Central Board of Excise and Customs (C.B.E.C) instructions state that credit is available if service tax is paid up to the place of removal. The Tribunal noted that the primary issue of determining the place of removal was not addressed by either party. It was highlighted that branches and consignment agents are recognized as places of removal. The matter was remanded to the Original Adjudicating Authority to decide the place of removal for different transactions and assess the admissibility of CENVAT credit based on relevant instructions and decisions.

Issue 2:
Regarding the determination of the place of removal, the Tribunal emphasized that the nature of the transaction and the stage where property in the goods passes to the buyer are crucial factors. The Tribunal directed the Appellant to provide details of the amount involved in category-wise transactions for further assessment. The Original Adjudicating Authority was instructed to make a decision after considering the details of transactions and giving the Appellant an opportunity to present their case. The Tribunal disposed of the stay petition and the appeal in this manner, awaiting the determination of the place of removal and the admissibility of CENVAT credit based on the provided information.

This judgment clarifies the importance of determining the place of removal for availing CENVAT credit on outward transportation services and highlights the need for detailed transaction information to make an informed decision.