2016 (10) TMI 616 - AT - Central Excise

CENVAT credit - manpower recruitment services - outward transportation of one of the exempted goods press mud - whether during the period October 2005 to June 2010, the appellant having paid the service tax on outward transportation of one of the exempted goods press mud, is eligible to avail the service tax credit and use the same for discharging central excise duty on service tax liability? - Held that - reliance placed on the decision of Commissioner of Central Excise, Kolhapur Versus M/s. Shree Chh Shahu Ssk Ltd. 2015 (2) TMI 265 - CESTAT MUMBAI where it was held that manpower also consumed for the purpose of handling waste and compost etc. is an essential part of manufacture of the product being excisable goods, etc. and accordingly, the same is fully allowable. The issue is similar as decided in the case of M/s. Shree Chh Shahu Ssk Ltd. - denial of CENVAT credit not justified - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Whether service tax credit can be availed on outward transportation of exempted goods like press mud from October 2005 to June 2010.

Analysis:
The issue in this case revolves around the eligibility of the appellant to avail service tax credit for the period from October 2005 to June 2010 on outward transportation of press mud, an exempted good. The Revenue argues that service tax credit cannot be availed on services related to exempted goods like press mud. However, referencing a previous case (Shree Chh. Shahu SSK Ltd., appeal E/1470/09), where the Tribunal considered the eligibility of availing cenvat credit on service tax paid for handling press mud, compost, and boiler ash with nil rate of duty, it was held that such credit is permissible. Drawing parallels with this precedent, the current judgment concludes that the appellant should be allowed to avail the service tax credit. The Tribunal's decision in the previous case sets a precedent for allowing credit on services related to exempted goods. Therefore, the impugned order denying the service tax credit to the appellant is deemed incorrect, leading to setting aside of the impugned order and allowing the appeal.

This judgment clarifies the interpretation of the law regarding the availment of service tax credit on outward transportation of exempted goods like press mud. It establishes a legal precedent based on a previous Tribunal decision, emphasizing that service tax credit can be claimed on services related to exempted goods with nil rate of duty. The judgment highlights the importance of consistency in legal interpretation and application, ensuring that taxpayers are not unfairly denied legitimate credits based on misconstrued arguments. The decision reflects a balanced approach in upholding the rights of taxpayers to claim credits within the framework of the law, ultimately providing clarity and guidance for similar cases in the future.