2019 (8) TMI 95 - AT - Central Excise

CENVAT Credit - input services - outward freight - period in which credit availed in dispute - HELD THAT - From the very beginning the stand of the appellant is that the service tax paid pertains to the period from April 2007 to March 2008 but they have availed the credit in the month of November 2008. This fact has been shown in ST-3 returns for the period September 2008 to March 2009 and the challans under which the service tax was paid also mention the period to which the said service tax pertains to. Besides this the appellant has also filed the Chartered Accountant certificate before me to prove that the cenvat credit pertains to GTA relates to period April 2007 to March 2008 and prior to April 2008. As the appellant has proved by way of documentary evidence and the certificate of the Chartered Accountant that the cenvat credit of service tax paid on GTA pertains to the period April 2007 to March 2008 therefore the appellants are entitled to take the cenvat credit of the same and there is no irregularity in availing the cenvat credit. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Wrong availing of cenvat credit on service tax paid towards outward freight
- Violation of principles of natural justice
- Interpretation of the term 'input service'
- Applicability of judicial precedents on cenvat credit for transportation services

Analysis:
1. The appeal was filed against the order rejecting the appellant's appeal regarding the wrongful availing of cenvat credit on service tax paid towards outward freight. The appellant, engaged in the manufacture of Sugar and Molasses, had availed cenvat credit on various inputs, input services, and capital goods. The original authority confirmed the demand of cenvat credit, interest, and imposed a penalty. The Commissioner (Appeals) upheld this decision, leading to the appeal.

2. The appellant argued that the impugned order lacked sustainability as it did not appreciate the evidence and binding judicial precedents properly. The appellant highlighted that the original authority's order was ex parte, violating principles of natural justice. The appellant contended that the service tax credit was for outward transportation service received during a specific period, as evidenced by their returns and a Chartered Accountant certificate.

3. The appellant relied on the interpretation of the term 'input service' and cited the case of CCE Vs. Vasavdatta Cements Ltd. The appellant argued that the credit availed on transportation service for delivering goods to the customer's door was permissible. The Chartered Accountant certificate supported the claim that the cenvat credit pertained to a specific period, making it admissible. The appellant also referenced other cases supporting the admissibility of cenvat credit for outward transportation services.

4. The learned AR defended the impugned order, stating that the appellant failed to provide sufficient evidence, specifically a Chartered Accountant certificate proving the period to which the service tax paid on GTA related.

5. After considering both parties' submissions and the evidence on record, the Tribunal found in favor of the appellant. The Tribunal noted that the appellant demonstrated through documentary evidence and the Chartered Accountant certificate that the cenvat credit on service tax paid on GTA pertained to a specific period. Relying on judicial precedents, including the case of CCE Vs. Vasavdatta Cements Ltd., the Tribunal concluded that the appellant was entitled to the cenvat credit, setting aside the impugned order and allowing the appeal with consequential relief.

Conclusion:
The Tribunal ruled in favor of the appellant, allowing the cenvat credit on service tax paid towards outward freight for the specific period in question, based on documentary evidence, legal interpretations, and judicial precedents.