2009 (7) TMI 86 - AT - Service Tax

Cenvat Credit service tax paid on GTA service - Brief facts of the case are that the respondent availed Cenvat credit in respect of the inputs as well as the inputs services under Cenvat Credit Rules, 2004. On scrutiny of the records, it was found that the assessee cleared the final products at factory gate only. No goods are sold through depots or warehouse of the respondent. Their factory gate is the only place of removal which is also accepted and confirmed by them vide letter dated 19.02.2007. It was further noticed that the respondent pays outward carriage freight while selling the above final products and pays service tax on the outward freight under Transport of goods by Road. However, the respondent has taken credit of service tax paid on the same. Held that Cenvat credit was allowed during the impugned period.

Summary

The Appellate Tribunal CESTAT, Mumbai, in the 2009 (7) TMI 86 judgment, heard an appeal filed by the Revenue against an order of the Commissioner (Appeals). The Commissioner (Appeals) had dismissed the Department's appeal as the respondent had followed Board Circular No. 97/6/2007-ST. The respondent availed Cenvat credit for inputs and input services under Cenvat Credit Rules, 2004. The respondent cleared final products only at the factory gate, paying service tax on outward freight but taking credit for it. A show cause notice was issued, but it was withdrawn based on the CBE&C Circular No. 97/6/2007. The Department appealed, arguing that the Circular's application was questionable. The judgment referenced the High Court of Punjab & Haryana's decision in Ambuja Cements Ltd. Vs. UOI, affirming the Circular's binding nature. The Tribunal found that the respondent had met the Circular's requirements and was entitled to Cenvat credit. The order was upheld, and the appeal by the Revenue was dismissed. Cross objections were also disposed of. The decision was pronounced in court by Shri Ashok Jindal, Member (Judicial), with Shri H.B. Negi, SDR for Appellants, and Ms. Aparna H. Adv. for Respondents present.