2009 (1) TMI 144 - AT - Service Tax

Eligibility of the service tax paid on outward transportation GTA service - unless the place of removal is determined as per the instructions issued by CBEC in Circular No. 97/8/2007-S.T., the eligibility for service tax paid on outward transportation as credit to the manufacturer cannot be decided - whether credit of service tax paid on outward transportation was up to the place of removal or beyond the place of removal has not at all been examined by lower authority matter remitted

Summary

Issues Involved: Eligibility of service tax paid on outward transportation by the appellants.

Analysis:
The issue involved in the stay petition and the appeal pertains to the eligibility of the service tax paid on outward transportation by the appellants. The appellant's advocate argued for an unconditional stay based on the fact that the issue had been referred to the Larger Bench in a previous case, indicating the existence of conflicting views. The advocate highlighted that the matter primarily involved a legal issue and, therefore, requested an unconditional stay based on precedent decisions. The respondent, however, relied on a Tribunal decision to counter this argument, stating that a mere expression of disagreement for referral does not establish conflicting ratios for granting a stay. It was noted that the lower authorities had not discussed the issue properly, and the determination of the place of removal was crucial for deciding the admissibility of service tax credit on outward transportation. The Circular issued by CBEC was referenced, emphasizing the importance of determining the place of removal before deciding on the eligibility of service tax credit. The order of the lower authorities was found lacking in examining the place of removal and the eligibility of credit for outward transportation.

Upon considering the submissions from both sides, it was evident that the basic issue of whether the credit of service tax for outward transportation extended up to or beyond the place of removal had not been addressed. Additionally, the determination of the place of removal, as mandated by the CBEC Circular, had not been carried out. Acknowledging the incomplete nature of the orders, it was agreed by both parties that the matter needed to be remanded for a fresh decision. The Original Adjudicating Authority was tasked with determining the place of removal and assessing the eligibility of credit in accordance with the Circular and other relevant judicial proceedings. The appellants were to be given an opportunity to present their case, and their submissions were to be considered in detail. Consequently, the stay petition and appeal were disposed of, with the matter remanded for further proceedings.