2009 (9) TMI 673 - AT - Service Tax

Cenvat Credit- Input services- Assessee had availed input service credit of service tax paid goods transport agency for outward movement of goods. Revenue authorities held that such credit availed by assessee was on outward transportation of its finished goods beyond place of removal and, hence assessee was not eligible to avail Cenvat Credit. In the light of the decision ABB Ltd. v. CCE&ST 2009 21 STT 77 (Bang. - CESTAT). v. CCE&ST 2009 -TMI - 34139 - CESTAT, BANGALORE, in which held that services availed by a manufacturer for outward transportation of final products from place of removal should be treated as input services and thus, manufacturer is entitled to take credit of service tax paid on value of such service, thus assessee eligible for Cenvat Credit. Appeal filed by revenue rejected.

Summary

Issues involved: Denial of Cenvat credit on service tax paid on 'Goods Transport Agency'.

Analysis:
The appeals before the Appellate Tribunal CESTAT, Bangalore raised a common issue regarding the denial of Cenvat credit on service tax paid on 'Goods Transport Agency' for outward transportation of goods. The Revenue authorities contended that the assessees were not eligible to claim Cenvat credit on service tax paid on outward transportation beyond the place of removal. Adjudicating authorities had confirmed the demands and penalties against the assessees, leading to appeals before the Commissioner (Appeals). The Commissioner (Appeals) had differing decisions in the appeals, setting aside orders in some cases and upholding them in others.

Upon hearing both sides and examining the records, the Tribunal noted that the issue had been previously addressed by the Larger Bench in the case of ABB Ltd. v. CCE&ST. The Larger Bench had concluded that services availed by a manufacturer for outward transportation of final products should be considered as an input service under the Cenvat Credit Rules, 2004. This ruling allowed the manufacturer to claim credit for the service tax paid on such transportation services. Consequently, the Tribunal found that the issue was now settled in favor of the assessee. As a result, the appeal filed by one of the assessees was allowed, while the appeals filed by the Revenue were rejected.

In conclusion, the Tribunal's decision aligned with the precedent set by the Larger Bench, affirming the right of manufacturers to claim Cenvat credit on service tax paid for outward transportation of goods through a Goods Transport Agency. The judgment provided clarity on the eligibility of manufacturers to avail such credits, ensuring compliance with the Cenvat Credit Rules, 2004.