2012 (12) TMI 612 - AT - Service Tax

Cenvat credit denied - application for inclusion of GTA service in the centralized registration pending - Held that - Final rejection of centralized registration cannot be held to be a justifiable reason for denial of the credit. Apart from the fact that during the said period, the application was pending in the office of Deputy Commissioner, without their being any decision taken by him on the same, there is otherwise no dispute about the availability of the credit to the appellant. The substantial benefit, if otherwise available, cannot be denied on the technical and procedural grounds - appellant was otherwise entitled to the benefit of Cenvat credit of Service Tax paid on GTA services, so received by them, the denial of the same on the ground that the credit was availed on the basis of invoices raised by their head office is neither justifiable nor warranted. Tax paid on the freight for dutiable transportation of the goods from the depots is also admissible as credit considering the earlier decision of the Tribunal in the case of appellants own case, vide Order dated 15.12.11 - in favour of assessee.

Summary

Issues:
1. Availment of Cenvat credit on GTA service receipt
2. Entitlement to Cenvat credit on freight from depots to buyers' premises

Analysis:

Issue 1: Availment of Cenvat credit on GTA service receipt
The dispute in this case revolves around the appellant's claim for Cenvat credit on Service Tax paid for GTA services during specific periods. The appellant availed the credit based on invoices issued by their Head Office as an input service distributor. The jurisdictional Central Excise authorities contended that the invoices were not proper for availing the credit due to pending and rejected applications for inclusion of GTA services in the centralized registration. The period in question was from 19.7.05 to 25.5.06. The Tribunal found that the rejection of the centralized registration could not justify denial of the credit, especially when the application was pending without a decision. The Tribunal emphasized that if the appellant was entitled to the Cenvat credit, it should not be denied on technical or procedural grounds. Therefore, the denial of credit based on the source of invoices was deemed unjustifiable and unwarranted.

Issue 2: Entitlement to Cenvat credit on freight from depots to buyers' premises
Another aspect of the case involved a Cenvat credit amounting to Rs.35,722 related to the question of whether the appellant could claim credit for Service Tax paid on freight from their depots to buyers' premises. After considering arguments from both sides, the Tribunal referred to a previous decision in the appellant's own case where it was established that tax paid on freight for dutiable transportation of goods from depots is admissible as credit. Consequently, the Tribunal set aside the impugned order and allowed the appeals, providing consequential relief to the appellant.

In conclusion, the judgment by Ms. Archana Wadhwa of the Appellate Tribunal CESTAT New Delhi addressed the issues of Cenvat credit on GTA service receipt and entitlement to credit on freight from depots to buyers' premises. The ruling emphasized the importance of ensuring that entitled benefits are not denied on technical or procedural grounds and upheld the appellant's right to claim the Cenvat credit in question.