2015 (10) TMI 1976 - AT - Central Excise

Denial of CENVAT Credit - input service - GTA - held that - When the claim of the respondent was that it satisfies the requirement of the circular, it should have produced the document before learned Commissioner (Appeals) for examination. But that was not done. Therefore, that Authority has directed lower authority to verify relevant evidence for the period Apr.06 to Mar.07. Therefore, his order does not appear to be incorrect. Accordingly, subject to carrying out of the direction of the learned Commissioner (Appeals) his finding does not call for interference. - Decided against Revenue.

Summary

Issues:
1. Denial of Cenvat credit on service tax paid for outward transportation.
2. Compliance with Circular No. 97/6/2007 and relevant case laws.
3. Verification of evidence by the lower authority.

Analysis:
1. The main issue in this case revolved around the denial of Cenvat credit on the service tax paid for transporting goods out of the factory for delivery to the buyer's premises. The Adjudicating authority initially denied this credit, but the appellate authority disagreed. The appellate authority considered outward transportation as part of the business activity, making the service tax paid on it admissible for Cenvat credit claim.

2. The respondent argued that they complied with Circular No. 97/6/2007 and cited several relevant case laws to support their claim for Cenvat credit on outward freight. The respondent highlighted decisions from the Hon'ble High Courts of Bombay, Karnataka, and Madras, which supported their position. However, the respondent failed to produce the necessary documents before the learned Commissioner (Appeals) for examination, leading to a directive for the lower authority to verify relevant evidence for a specific period.

3. The lower authority's directive for verification of evidence for the period in question was considered appropriate, given the lack of document submission by the respondent before the Commissioner (Appeals). The order of the lower authority was upheld, and the Revenue's appeal was dismissed based on the need for verification and compliance with the directive. The judgment emphasized the importance of providing necessary evidence to support claims for Cenvat credit, in line with the relevant circulars and legal precedents cited.