2016 (7) TMI 1170 - AT - Central Excise

Benefit of cenvat credit of service tax paid on the GTA services on outward transportation of the finished goods denied - Held that - Outward transportation of the finished goods is an activity relatable to the assessee s business and as such service tax paid on the same would be admissible as cenvat credit. - Decided in favour of assessee

Summary

Issues: Denial of cenvat credit on service tax paid for GTA services; Denial of credit for outward transportation as an input service.

In the judgment by the Appellate Tribunal CESTAT NEW DELHI, the appellant, engaged in manufacturing Alloy Steels and Billets, was denied the benefit of cenvat credit for service tax paid on GTA services used for outward transportation of finished goods. The denial was based on the use of TR-6 challans, which the Revenue argued were not eligible documents for credit. Both sides acknowledged that previous decisions by the Tribunal and High Courts had addressed this issue, supporting the appellant's eligibility for credit based on TR-6 challans. The Tribunal found no reason to deviate from this established legal position and ruled in favor of the appellant, granting them the credit.

Regarding the denial of credit for outward transportation as an input service, the Tribunal referenced various decisions, including those involving CCE Vs. ABB Ltd., CCE Vs. Parth Poly Wooven Pvt. Ltd., and others, which established that the outward transportation of finished goods is an activity related to the assessee's business and thus qualifies for cenvat credit on the service tax paid. The Tribunal concluded that both issues were decided in favor of the assessee, leading to the setting aside of the impugned order and allowing the appeal with consequential relief. The judgment highlights the importance of established legal precedents in determining the eligibility of cenvat credit for specific services and activities related to the business operations of the assessee.