2019 (11) TMI 180 - AT - Service Tax

CENVAT Credit - input services - GTA service for transportation of the excisable goods from the factory for delivery at the buyer s premises - period from July 2015 to June 2016 - HELD THAT - The place of removal was the factory gate and the appellant had arranged transportation for delivery of the goods at the buyer s factory. The issue, as to whether, buyer s premises should be considered as place of removal for the benefit of Cenvat credit of service tax paid on GTA service was dealt with by the Hon ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE SERVICE TAX VERSUS ULTRA TECH CEMENT LTD. 2018 (2) TMI 117 - SUPREME COURT , holding that Cenvat credit on goods transport agency service availed for transport of goods from place of removal to buyer s premises was not admissible to the respondent. Since, the modus operandi adopted by the appellant in the present case is identical to the facts and circumstances of the case decided by the Hon ble Supreme Court, there are no justifiable reason to accept the submissions of learned Advocate for the appellant that the benefit of outward transportation of goods should be available to the appellant for the Cenvat benefit. Appeal dismissed - decided against appellant.

Summary

Issues: Disallowance of Cenvat credit on service tax paid for outward transportation service.

In this case, the appellant, engaged in manufacturing excisable goods, availed Cenvat credit of service tax paid on GTA service for transporting goods to the buyer's premises. The department disputed the credit, initiating show cause proceedings resulting in an adjudication order disallowing the credit. The Commissioner (Appeals) upheld this decision, leading to the appellant's appeal before the Tribunal.

The appellant's case falls under the amended provisions of Rule 2(l) of the Cenvat Credit Rules, 2004, where outward transportation to the place of removal of the final product is considered an input service for Cenvat credit. The Tribunal noted that the place of removal in this case was the factory gate, and transportation was arranged to the buyer's factory. Referring to a Supreme Court judgment, the Tribunal held that credit for transportation beyond the place of removal to the buyer's premises was not admissible. As the appellant's situation mirrored the Supreme Court case, the Tribunal rejected the appellant's argument for the benefit of outward transportation for Cenvat credit.

Ultimately, the Tribunal found no fault in the Commissioner (Appeals)'s order and dismissed the appellant's appeal. The judgment highlights the importance of correctly interpreting the definition of input service and the place of removal concerning the availment of Cenvat credit on service tax paid for outward transportation services.