2019 (7) TMI 1172 - AT - Central Excise

CENVAT Credit - input services - GTA Services - Courier Services - place of removal - HELD THAT - There is no allegation that the appellant has included the Air freight charges also for availing the credit on GTA Services. In fact, the show-cause notice has been issued proposing to disallow the credit on GTA Services and Courier charges alleging that these are not input services as per the definition. The present contention of the department that appellants have included the Air freight charges also in the GTA Services ought to have been alleged in the show-cause notice. Further, as per the definition of GTA Service, it includes only transportation of goods by road. A fresh ground raised in the show-cause notice is put forward by Commissioner (Appeals) to deny the credit. Again, Commissioner (Appeals), who is a fact finding authority in case of doubt ought to have called for the report from the Range Superintendent. Instead, the matter is again remanded for another round of litigation. The department cannot deny credit on assumptions and presumptions. The appellants have pleaded in the reply to show-cause notice itself that they have availed credit only from the factory upto the airport. There is nothing brought out by the department to discredit this contention made by the appellants. Courier services - HELD THAT - The Courier Services having been availed by the appellant mainly for outward transportation of documents as well as samples of the product, the said service qualifies as an input service having availed in relation to manufacture of finished products - the disallowance of credit on GTA Services and Courier Services is unjustified and requires to be set aside - credit allowed. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Eligibility for credit on GTA Services [Outward] ?1,23,326/- and Courier Services [Outward] ?49,680/-

Detailed Analysis:
The case involved a 100% E.O.U. engaged in the manufacture of organic chemicals seeking credit for service tax paid on various services. The Commissioner (Appeals) disallowed credit for GTA Services and Courier Services. The matter was remanded to the adjudicating authority, leading to an appeal before the Tribunal. The appellant argued that they availed GTA Services only up to the port for export by air, as reflected in consignment notes. The appellant relied on Circulars and legal precedents to support their claim for credit on outward freight up to the port of export. The Revenue contended that the appellant might have included air freight charges in GTA Services for availing credit. The issue was whether the appellant was eligible for credit on GTA Services and Courier Services.

The Tribunal considered the contentions of both parties. It noted that the show-cause notice did not allege inclusion of air freight charges in GTA Services for availing credit. The Commissioner (Appeals) raised a new ground to deny credit without proper verification. Referring to Circulars, the Tribunal highlighted that in case of export, the place of removal is the port, making the appellant eligible for credit up to the airport. The Tribunal found no evidence to discredit the appellant's claim of availing credit only up to the airport. Relying on legal precedents, the Tribunal held that the disallowance of credit on GTA Services was unjustified and set it aside.

Regarding Courier Services, the Tribunal found them eligible as they were used for outward transportation of documents and samples related to manufacturing finished products. The Tribunal concluded that the disallowance of credit on GTA Services and Courier Services was unwarranted and set it aside, allowing the appeal with consequential reliefs.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal with consequential reliefs, if any.