2019 (9) TMI 1132 - AT - Central Excise

CENVAT credit - input services - renting of crates used for carrying of final products to the buyer s premises - place of removal - HELD THAT - As per the definition of input services , the restriction to avail credit upto the place of removal is applicable only for outward transportation of goods. In the present case, the input services availed by the appellant is renting of crates and not for transportation of goods - The renting of crates has nothing to do with GTA Services and merely because the crates have been used for supply of the goods to the buyer s premises, it cannot be said that the renting of crates is not eligible for credit. Credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Availment of input services credit on renting of crates used for carrying final products
- Denial of credit by department beyond the place of removal
- Interpretation of 'input services' definition post 01.04.2008

Analysis:

The case involves the appellant, a manufacturer of motor vehicle parts, availing input services credit on renting crates used for transporting final products to buyers. The department contended that such credit is not permissible as services were utilized beyond the place of removal. A show-cause notice was issued for recovery of credit along with penalties. The original authority and Commissioner (Appeals) upheld the demand, leading to the current appeal.

The appellant argued that the renting of crates for packing and stacking of goods is distinct from outward transportation services provided by GTA. They highlighted a previous Tribunal decision supporting their stance. The department, represented by the Authorised Representative, maintained that the crates were used for outward transportation to buyers' premises, justifying the denial of credit. They emphasized the post-2008 amendment specifying credit eligibility only up to the place of removal, i.e., the factory gate.

After hearing both sides, the Tribunal scrutinized the invoices for hiring crate charges and the service tax paid. It was noted that the renting of crates for stacking parts did not fall under outward transportation of goods, as per the 'input services' definition. The Tribunal concluded that the denial of credit for renting crates was unjustified, citing the previous decision favoring the appellant. Consequently, the impugned order was set aside, and the appeal was allowed with any necessary consequential reliefs.

In summary, the judgment clarifies the distinction between services related to outward transportation and those like renting of crates for internal processes. It underscores the importance of aligning credit availment with the specific definitions and provisions under the law, ultimately ruling in favor of the appellant's entitlement to credit for hiring crates despite the department's objections.