2009 (8) TMI 380 - AT - Service Tax

Cenvat Credit- Input Services- Whether inclusion of inward transportation of input or capital goods and outward transportation of inputs or capital goods and outward transportation up to place of removal in definition of input service by no means exclude services used for clearance of final product from place of removal from being treated as eligible input service in terms of main definition? - Whether, therefore, goods transport service in an input service even when used for clearance of final product from place of removal and availment of credit on same cannot be denied? Commissioner (Appeals) in the light of the decision of ABB Ltd. v. CCE&ST 2009 -TMI - 34139 - CESTAT, BANGALORE, held that the definition of input service has to be interpreted in the light of the requirements of business and it cannot be read restrictively so as to confine only up to the factory or up to the depot of manufacturers. - the services availed by a manufacturer for outward transportation of final products from the place of removal should be treated as an input service in terms of rule 2(l)(ii) of the Cenvat Credit Rules, 2004 and thereby enabling the manufacturer to take credit of the service tax paid on the value of such services. Tribunal held that Tribunal is correct and reject the appeal filed by revenue.

Summary

The Appellate Tribunal CESTAT, Bangalore heard a miscellaneous application for out-of-turn hearing of Appeal No. ST/100/2007. The applicant argued that the issue, involving an amount of Rs. 66,48,600, was covered by the decision of the Larger Bench in the case of ABB Ltd. v. CCE&ST. The Tribunal found that the issue was settled by the Larger Bench and allowed the application for out-of-turn hearing. The learned Commissioner had already ruled in favor of the respondent. The issue concerned whether services for clearance from the place of removal included outward transportation, with the Tribunal ultimately deciding in favor of the respondent based on the definition of "input service" in the Cenvat Credit Rules. The Tribunal's decision was in line with the Larger Bench's ruling in the ABB Ltd. case, which interpreted "input service" broadly to include services for outward transportation of final products. As a result, the Tribunal rejected the appeal filed by the revenue. The judgement was delivered by M.V. Ravindran, Judicial Member, and P. Karthikeyan, Technical Member. The appellant was represented by V. Raja Ram, and the respondent by R.G. Utagikar.