2016 (6) TMI 436 - AT - Central Excise

Denial of Cenvat credit on GTA services - denial of credit on the ground that the input service as defined under Rule 2 (l) of Cenvat Credit Rules, 2004 does not allow credit on transportation beyond the place of removal - whether the transportation of clinker from Shambhupura to Bhatinda cannot be considered as input service for the manufacture of such clinker - Held that - Considering the series of decisions by various High Courts which have been consistently followed by the various Benches of the Tribunal, it is inclined to follow the ratio followed by these decisions to hold that the appellant is eligible for Cenvat credit on GTA services now under dispute.

Summary

Issues:
Challenge to denial of Cenvat credit on GTA services for transport of cement clinker beyond the place of removal.

Analysis:
The appellant challenged the denial of Cenvat credit on GTA services for transporting cement clinker from one unit to another. The lower authorities rejected the credit, stating that transportation beyond the place of removal does not qualify as an input service for manufacturing. The appellant argued that the definition of "input service" during the relevant period allowed credit for transport of goods "from the place of removal." They cited changes in the definition effective from 01/4/2008 to support their claim.

The appellant relied on various case laws, including CCE & ST, LTU, Bangalore vs. ABB Limited, CCE & Cus. vs. Parth Poly Wooven Pvt. Ltd., CCE, Chennai vs. Borg Warner Morse TEC Murugappa Pvt. Ltd., and others, to support their position. The appellant contended that the credit eligibility should extend up to the place of removal, which was supported by the decisions in the cited cases.

On the other hand, the authorized representative argued that credit availability cannot extend beyond the place of removal. Referring to the amendment in 01/4/2008, it was stated that the change was merely clarificatory. The authorized representative cited the decision of the Hon'ble High Court of Calcutta in CCE, Kolkata - VI vs. Vesuvious India Ltd., which differed from previous decisions by other High Courts.

After considering both sides' submissions, the Tribunal noted that the issue of Cenvat credit availability on GTA services for transporting final products had been disputed in various High Courts and the Tribunal. The Tribunal observed that different High Courts arrived at different conclusions, with the scope of the term "from the place of removal" being examined in detail by the Hon'ble Andhra Pradesh High Court. The Tribunal decided to follow the consistent ratio of decisions by various High Courts and Tribunal benches, concluding that the appellant was eligible for Cenvat credit on GTA services in question. Consequently, the appeal was allowed with any consequential relief.

In summary, the Tribunal's decision favored the appellant's claim for Cenvat credit on GTA services for transporting cement clinker between units, based on the interpretation of the definition of "input service" and consistent precedents from various High Courts and Tribunal benches.