2009 (12) TMI 211 - AT - Service Tax

Cenvat Credit- The Asstt. Commissioner vide order-in-original, confirmed Cenvat Credit demand of Rs. 69,271 against the appellant along with interest and imposed penalty of Rs. 10,000 on them under rule 15 of Cenvat Credit Rules, 2004 on the following grounds - The appellant had wrongly taken Cenvat credit of Rs. 41,522 in respect of the service tax paid on the outward transportation from the place of removal, which is not covered by the definition of input service. In the light of the decision of ABB Ltd. v. CCE&ST 2009 -TMI - 34139 - CESTAT, BANGALORE, held that- the impugned order disallowing the Cenvat credit of Rs. 41,522 in respect of outward transportation of the finished goods from the place of removal is not sustainable and same is set aside.

Summary

Issues:
- Disallowance of Cenvat credit on service tax paid for outward transportation of finished goods
- Interpretation of input service under Cenvat Credit Rules, 2004

Analysis:
1. The case involved an appeal by a manufacturer of Rough forgings and Railway Locomotive Parts against the disallowance of Cenvat credit by the Asstt. Commissioner. The disallowed amount was Rs. 41,522 related to service tax paid on outward transportation of finished goods, which the Commissioner (Appeals) upheld.

2. During the hearing, the appellant's representative acknowledged the duty liability of Rs. 27,749 for service tax on GTA service used for transporting inputs to the factory, which had been paid in cash. The appellant contested only the denial of Cenvat credit for the service tax on outward transportation of finished goods, citing a Larger Bench judgment of the Tribunal in the case of ABB Ltd. v. CCE&ST.

3. The Technical Member carefully considered the arguments presented by both sides and examined the records. The key issue in the appeal was the eligibility of the appellants for Cenvat credit amounting to Rs. 41,522 for service tax on outward transportation of finished goods. Referring to the Larger Bench judgment in the case of ABB Ltd., the Technical Member found that the disallowance of Cenvat credit in this regard was not sustainable. Consequently, the impugned order disallowing the credit was set aside, and the appeal was disposed of in favor of the appellant.

This detailed analysis of the judgment highlights the specific issues raised, the arguments presented by both parties, and the final decision rendered by the Technical Member based on the interpretation of relevant legal provisions and precedents.