2016 (8) TMI 1056 - AT - Service Tax

Cenvat credit - service tax paid on the freight incurred for movement of goods from their depot to another depot of their own - Held that - it is found that the place of removal in respect of the goods sold from depot is the depot from which the goods are sold. Therefore, the services received prior to sale from a depot, like transportation from one depot to another would be admissible as the credit by referring the decision of Tribunal in the case of Brakes India Ltd. Vs. CCE 2005 (1) TMI 211 - CESTAT, CHENNAI . Accordingly, the credit of service tax paid on transportation of goods from one depot to another is allowed. Cenvat credit - service tax paid on maintenance of garden service - Held that - it is noticed that the appellants are not in a position to clarify the details asked by the Commissioner (Appeals). Even in the Tribunal they were unable to point out the exact nature of services used. In these circumstances, the decision of the Commissioner (Appeals) to remand the matter to the original adjudicating authority is upheld. - Decided partly in favour of appellant

Summary

Issues: Denial of credit on service tax paid for transportation between depots and maintenance of garden service.

Transportation of Goods between Depots:
The appellant, M/s.BASF India Ltd., faced a notice seeking to deny credit on certain services, including service tax paid on the freight for moving goods between their depots. The lower authorities allowed credit on most services but denied it for transportation between depots and maintenance of garden service. The appellant argued that credit for transportation between depots should be allowed as the place of removal is the depot from which goods are sold, citing a Tribunal decision affirmed by the Supreme Court. The Tribunal agreed, allowing the appeal for credit on transportation services.

Maintenance of Garden Service:
Regarding the credit for the maintenance of garden service, the appellant claimed it should be admissible as it was necessary for pollution control, but could not provide details on the nature of services used. The Tribunal noted the lack of clarity on the services and upheld the decision to remand the matter for further information, as requested by the Commissioner (Appeals). The appeal was partly allowed, upholding the remand for clarification on the nature of services used for garden maintenance.

In conclusion, the Tribunal allowed the credit for service tax paid on transportation of goods between depots based on the place of removal being the depot from which goods are finally sold. However, the decision to remand the issue of credit for maintenance of garden service for further clarification was upheld due to the lack of information provided by the appellant.