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2018 (12) TMI 71 - AT - Central ExciseCENVAT Credit - input services - GTA Service - Service Tax paid on outward freight on goods cleared from factory to the customer s premises i.e. beyond the place of removal - Rule 2(l) of the CENVAT Credit Rules, 2004 - Held that - The issue is now well covered by the decision of Hon ble Supreme Court in the case of CCE Belgaum Vs. Vasavadatta Cements Ltd. 2018 (3) TMI 993 - SUPREME COURT , where it was held that from 01.04.2008, with the amendment, the CENVAT credit is available only upto the place of removal whereas as per the amended Rule from the place of removal which has to be upto either the place of depot or the place of customer, as the case may be - credit allowed - appeal allowed - decided in favor of appellant.
Issues:
Credit of Service Tax on outward freight beyond the place of removal under Cenvat Credit Rules, 2004. Analysis: 1. The appellant, engaged in manufacturing CR Strips, Precision Pipes, and Tubes, availed credit on input services, including Good Transport Agency Service. A Show Cause Notice was issued alleging inadmissibility of credit on outward freight beyond the place of removal. 2. The Adjudicating Authority disallowed the credit, leading to recovery, interest, and penalty. The Ld. Commissioner (Appeals) upheld the decision, prompting the present appeal before the Tribunal. 3. The issue was analyzed in light of the Supreme Court's decisions in specific cases, establishing the eligibility of service tax credit on transportation up to the place of removal. The phrase 'place of removal' was crucial in determining credit eligibility. 4. The definition of 'input service' and the Circular No. 97/8/2007-ST clarified the conditions for covering cases within the 'place of removal,' emphasizing ownership, risk-bearing, and freight charges as integral parts of the price of goods. 5. The Tribunal found that the Department's contention regarding outward transportation not being eligible for input service beyond the place of removal was not tenable under the prevailing definition. The judgments of CESTAT in relevant cases were considered to interpret the scope of input services. 6. The Circular's conditions defining 'place of removal' were crucial in determining the eligibility of credit on service tax paid on transportation. The Tribunal emphasized that outbound transportation from the place of removal, whether to a warehouse or customer's premises, constituted an input service. 7. Upholding the impugned judgment, the Tribunal dismissed the appeals, citing adherence to the Supreme Court's rulings and allowing the appellant's appeal based on the established legal principles. 8. The period of dispute was found to be covered by the cited decisions, leading to the setting aside of the impugned Order and allowing the appellant's appeal based on the Supreme Court's precedent. This detailed analysis of the judgment highlights the interpretation of the 'place of removal' in determining the eligibility of credit on service tax paid on outward freight beyond the factory premises. The Tribunal's decision aligned with established legal principles and Supreme Court rulings, emphasizing the importance of the definition of 'input service' and the conditions for credit eligibility under the Cenvat Credit Rules, 2004.
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