2018 (11) TMI 451 - HC - Central Excise

Cenvat Credit input services - GTA service procurement of fly ash and supply of cements - round trip transport - freight charges for both types of transports were availed by the assessee Held that - The respondent assessee is paying the service tax on the basis of rate fixed for per metric ton, which is to and fro from the cement factory to the Thermal Plant - Tribunal rightly relying on the decision in the case of C.C.E., Guntur 2010 (2) TMI 284 - CESTAT, BANGALORE has set aside the demand and notice issued by the Department - credit allowed - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Interpretation of CENVAT Credit Rules regarding input service for transportation.
2. Disallowance of CENVAT Credit for the return trip of the truck from the factory to the Thermal Power Plant.

Analysis:
1. The case involved a dispute regarding the CENVAT Credit availed by the respondent for the transportation of fly ash, a major input/raw material for cement manufacturing. The respondent procured fly ash from Thermal Power Plants using two modes of transportation: open trucks for one-way trips and bulkers for round trips. The freight charges were paid based on the metric ton of fly ash transported. The Department issued a show cause notice disallowing CENVAT Credit for the return trip of the truck from the factory to the Thermal Power Plant.

2. The High Court analyzed the situation and noted that the respondent was paying service tax based on the rate fixed per metric ton for the transportation to and from the cement factory to the Thermal Plant. The Court referred to the decision in a previous case and concluded that the learned Tribunal was correct in setting aside the demand and notice issued by the Department. The Court found no grounds to interfere with the Tribunal's decision, stating that no substantial question arose in the appeal. Consequently, the appeal filed by the Department was deemed to lack merit and was dismissed.