2019 (4) TMI 1539 - AT - Service Tax

CENVAT credit - Input service - GTA - goods transport agency service availed for transport of goods from the place of removal to depots or the buyers premises - interpretation of statute - input service which is defined in Rule 2(l) of the CENVAT Credit Rules, 2004 - period from January, 2005 to March, 2008 - HELD THAT - The issue is decided in the case of Commr. of Central Excise, Belgaum vs. Vasavadatta Cement Ltd. 2018 (3) TMI 993 - SUPREME COURT , where it was held that tax paid on the transportation of the final product from the place of removal upto the first point, whether it is depot or the customer, has to be allowed. Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Interpretation of Cenvat Credit Rules regarding input services for outward transportation of goods.

Detailed Analysis:

Issue 1: Interpretation of Cenvat Credit Rules for outward transportation
The case involved the appellant engaged in the manufacture and sale of iron and steel products, availing CENVAT Credit for service tax paid on outward transportation of finished goods. The appellant contended that services beyond the place of removal were considered input services under Rule 2(I)(ii) of the Cenvat Credit Rules. However, the Commissioner alleged irregular Cenvat Credit claiming that services beyond the place of removal did not qualify as input services. The Tribunal examined the issue in light of the Supreme Court judgment in the case of Commr. of Central Excise, Belgaum vs. Vasavadatta Cement Ltd. The Tribunal noted that the definition of 'input service' includes services used by the manufacturer in relation to the manufacture of final products, extending to the clearance of final products from the place of removal. The judgment emphasized that transportation charges up to the customer's premises were included in the definition of 'input service.' The Tribunal highlighted the amendment effective from 1-4-2008, substituting 'from the place of removal' with 'upto the place of removal,' clarifying that transportation charges were part of 'clearance from the place of removal.' The Tribunal concluded that the appellant's period (January 2005 to March 2008) fell within the scope of the Supreme Court decision, setting aside the impugned order and allowing the appeal.

Conclusion:
The Tribunal, based on the Supreme Court judgment and the subsequent amendment to the Cenvat Credit Rules, ruled in favor of the appellant, allowing CENVAT Credit for outward transportation services beyond the place of removal. The decision provided clarity on the interpretation of input services under the Cenvat Credit Rules, ensuring compliance with the applicable tax regulations.