2010 (3) TMI 492 - AT - Service Tax

Cenvat Credit - Input Services- Assessee availed GTA service for outward transportation of finished goods from factory to buyer s premises. It cleared goods on For destination bais but borne freight itself and also paid service tax on it. Held that - prima facie case in favour of assessee thus waived the pre deposit.

Summary

Issues:
1. Demand of duty on denial of CENVAT credit for GTA service for outward transportation.
2. Prima facie case in favor of the appellant.
3. Applicability of Tribunal's decision in ABB Ltd. v. CCE & ST.
4. Consideration of GTA service as 'input service' for CENVAT credit.
5. Relevance of Board's Circular No. 97/8/2007/ST and High Court's judgment in Ambuja Cement Ltd. v. Union of India.
6. Waiver of pre-deposit and stay of recovery for duty and penalty amounts.

Analysis:

1. The judgment dealt with the demand of duty amounting to over Rs. 26 lakhs from the appellant due to the denial of CENVAT credit on GTA service used for outward transportation of finished goods. The goods were cleared on 'FOR destination' basis, and the freight was borne by the assessee. A specimen invoice revealed that no freight was charged from the buyer, leading to a prima facie case in favor of the appellant.

2. The Tribunal noted that the reliance on the decision in ABB Ltd. v. CCE & ST was not entirely appropriate as the operation of that decision was stayed by the Hon'ble Karnataka High Court. Additionally, the assessee considered GTA service as an 'input service' for CENVAT credit, contrary to the decision in Alstom Projects India Ltd. v. CCE, where GTA service was not considered an output service under the CENVAT Credit Rules, 2004.

3. The judgment also considered the relevance of Board's Circular No. 97/8/2007/ST and the High Court's judgment in Ambuja Cement Ltd. v. Union of India, both of which were found to be prima facie supportive of the appellant's case. These references further strengthened the appellant's position in the matter.

4. Consequently, the Tribunal ordered a waiver of pre-deposit and a stay of recovery concerning the duty and penalty amounts, indicating a favorable outcome for the appellant based on the analysis of the facts, legal provisions, and relevant precedents cited during the proceedings.