2016 (9) TMI 242 - AT - Service Tax

CENVAT credit input service GTA service place of removal - Section 4(3)(c) of Central Excise Act, 1944 input service - Rule 2(l)(ii) of Cenvat Credit Rules, 2004 - credit of service tax on the outward transportation is admissible up to the place of removal, from where the sale of goods took place Held that - When the ownership of the goods was passed over to the buyer only after the sale had been made and it is over / completed at the depot; then the place of removal in terms of definition of input service given in Rule 2(l) of CCR, 2004 would be depot of the appellant only. The sale of appellant took place from the depot only . Further, the appellant has included the outward freight charges in the value of the goods being sold to their buyers for the purpose of payment of duty of Central Excise appellant entitled to CENVAT credit appeal allowed decided in favor of appellant.

Summary

Issues involved:
Disallowance of Cenvat credit for service tax paid on outward freight (GTA Service).

Analysis:
- The appellant argued that the definition of input service in Cenvat Credit Rules, 2004 includes outward transportation from the place of removal, citing relevant case laws.
- The appellant emphasized the importance of the definition of place of removal under the Central Excise Act, stating that if sales occur after removal from the factory, that place is considered the place of removal for the purpose of claiming credit on outward transportation.
- The appellant highlighted that the majority of sales are from the depot, and transportation costs to the depot are included in the assessable value for duty payment, making the service tax credit on outward transportation admissible.
- The appellant supported their argument with additional case laws to strengthen their position on claiming Cenvat credit for outward transportation.

- The Revenue, represented by ARs, upheld the lower authorities' decisions to deny Cenvat credit on outward transportation service tax.
- The Tribunal analyzed the facts, submissions, and case laws cited by both parties, concluding that the appellant's sales predominantly occurred at the depot, justifying the claim for Cenvat credit on outward transportation.
- The Tribunal noted that the appellant included outward freight charges in the value of goods sold for Central Excise duty payment, further supporting the eligibility for Cenvat credit on outward transportation.
- Relying on relevant case laws, including decisions from the High Courts, the Tribunal allowed the appeal, granting the appellant the Cenvat credit on the input service of outward transportation.

This detailed analysis of the judgment comprehensively covers the issues involved and the arguments presented by both parties, leading to the Tribunal's decision in favor of the appellant regarding the Cenvat credit for service tax paid on outward freight.