2012 (5) TMI 402 - AT - Service Tax

Cenvat Credit on outward GTA Held that - in ABB Ltd (2011 - TMI - 203985 - KARNATAKA HIGH COURT - Service Tax) held that, till the amendment (effective from 1/4/2008) of clause (ii) of Rule 2(l) of the CCR through substitution of the word upto for the word from , transportation charges incurred by a manufacturer for clearance of final products from the place of removal stood included in the definition of input service Availment of Cenvat credit on outward transportation of goods and C&F Agent service Held that - in Metro Shoes Pvt. Ltd. (2008 - TMI - 4278 - CESTAT, MUMBAI - Service Tax) wherein it had been held that services rendered by various service providers like C&F agents during the course of transportation of the final products from the factory of the manufacturer to their own showrooms located at various places were input services for the manufacturer as these services were used by the manufacturer, directly or indirectly, in or in relation to the clearance of the final product from the place of removal. appeals are allowed

Summary

Issues involved:
1. Availment of Cenvat credit on outward transportation of goods and C&F Agent service from April 2004 to November 2007.

Analysis:
1. The first issue involves the Cenvat credit of service tax paid on Goods Transport Agents Service (GTA Service) for outward transportation of final products. The lower authorities initially denied the credit, citing a Tribunal decision. However, the appellant challenged this based on a Karnataka High Court judgment, which upheld that transportation charges for clearance of final products qualify as 'input service' until 31/3/2008. Following the High Court's ruling, the Tribunal held in favor of the appellant on this issue.

2. The second issue pertains to the Cenvat credit on service tax paid by C&F Agents for services related to the sale of manufactured goods. The original authority and one appellate authority denied the credit, stating it was rendered after goods clearance. However, another appellate authority reversed this decision, citing a Tribunal ruling that such services are 'input services' used directly or indirectly in the clearance of final products. The appellant argued that the Department accepted the latter decision, making the earlier denial invalid. As the Revenue did not challenge the favorable decision, the Tribunal held in favor of the appellant on this issue as well.

3. The Tribunal set aside the adverse portions of the impugned orders and allowed all appeals, concluding the judgment in favor of the appellant on both issues.