2009 (10) TMI 211 - AT - Service Tax

Cenvat Credit- Input services-Board s Circular No 97/6/2007-ST, dated 23.8.2007- whether the appellant is entitled to CENVAT credit of the service tax paid on GTA service and Travel Agency service (both these services having been utilised in connection with outward transportation of the semi-finished/finished goods from factory/depot during the period of dispute) and to utilise such credit for payment of duty on excisable goods. In the light of the decision of Ambuja Cements Ltd. v. Union of India 2009 -TMI - 32932 - PUNJAB & HARYANA HIGH COURT, held that- the present case to be fit for remand, set aside the orders of the lower authorities and allow these appeals by remand directing the original authority to take fresh decision on the issue in the light of the Board s circular dated 23-8-2007.

Summary

Issues:
Entitlement to CENVAT credit of service tax paid on GTA service and Travel Agency service for outward transportation of goods.

Analysis:
The main issue in this case revolves around whether the appellant is entitled to claim CENVAT credit for the service tax paid on GTA service and Travel Agency service used for outward transportation of goods. The question is to be analyzed in light of the definition of 'input service' under rule 2(l) of the CENVAT Credit Rules, 2004, as interpreted by competent courts of law. Reference has been made to various judicial decisions to support both sides of the argument. The appellant relies on the Tribunal's Larger Bench decision in ABB Ltd. v. CCE & ST and Coca-Cola India (P.) Ltd. v. CCE for the interpretation of 'input service.' On the other hand, the learned SDR cites the Maruti Suzuki Ltd. v. CCE judgment by the Supreme Court, emphasizing the need to read the definition of 'input' in its entirety.

The judicial authorities cited were not available to the lower authorities, indicating a lack of consideration of recent precedents. In a similar case, Visaka Industries Ltd. v. Commissioner, the Bench remanded the case for fresh decision in light of the Board's circular and the judgment in Ambuja Cements Ltd.'s case. Following this precedent, the current case is deemed fit for remand. The orders of the lower authorities are set aside, and the appeals are allowed by remand. The original authority is directed to reevaluate the issue considering the relevant circular, the judgment in Ambuja Cements Ltd.'s case, and other decisions cited. Importantly, the appellant must be given a reasonable opportunity to present their case, including any issues related to limitation.

This detailed analysis highlights the significance of recent judicial interpretations in determining the entitlement to CENVAT credit for service tax paid on GTA service and Travel Agency service for outward transportation of goods. The decision emphasizes the need for a thorough examination of the definition of 'input service' and the importance of considering all relevant legal precedents in reaching a final determination.