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2019 (8) TMI 759 - HC - Central ExciseCENVAT Credit - input services - place of removal - transportation charges incurred by the manufacturer for clearance of final product from the place of removal - HELD THAT - Reliance was placed in the cases of COMMISSIONER OF CENTRAL EXCISE BELGAUM VERSUS M/S. VASAVADATTA CEMENTS LTD. 2018 (3) TMI 993 - SUPREME COURT and COMMISSIONER OF CUSTOMS CENTRAL EXCISE AND SERVICE TAX GUNTUR VERSUS M/S. THE ANDHRA SUGARS LTD. 2018 (2) TMI 285 - 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. The matter may go back to the learned Tribunal to look into the factual aspects of the matter again with respect to the applicability of the above two judgments of the Apex Court in the case of assessee - Appeal allowed by way of remand.
Issues:
Interpretation of the definition of "input service" for eligibility of CENVAT credit of service tax based on transportation charges incurred by the manufacturer for clearance of final product from the place of removal. Analysis: The High Court of Madras addressed the appeal filed by the Revenue challenging the Tribunal's order on whether transportation charges incurred by the manufacturer for clearing the final product from the place of removal fall under the definition of "input service" for availing CENVAT credit of service tax. The Tribunal, relying on the Karnataka High Court's decision, ruled in favor of the assessee, including transportation charges in the definition of "input service" until 01.04.2008, when the law was amended. The appellant contended that the Supreme Court's judgments in CCE Vs. Vasavadatta Cements Limited and CCE Vs. Andhra Sugars post the Tribunal's decision, altered the interpretation of the term "input service". The Supreme Court judgments highlighted by the appellant emphasized that the tax paid on transportation of the final product from the place of removal to a specific point, such as a depot or customer, should be allowed. The judgments referred to Circular No.97/8/2007-S.T., which clarified the definition of "input service" and outlined conditions related to the "place of removal," including ownership of goods until delivery, seller bearing risks during transit, and freight charges being an integral part of the goods' price. The Court noted that the issue was analyzed considering previous tribunal judgments and Section 4 of the Act, confirming that outbound transportation from the place of removal qualifies as an input service. The respondent argued that the controversy was settled by the Supreme Court judgments, and the Tribunal's decision was justified. The High Court, after hearing both parties, decided to remand the matter back to the Tribunal to reevaluate the factual aspects in light of the Supreme Court judgments. The Court directed the Tribunal to reconsider the case, taking into account the applicability of the Supreme Court judgments. The appeal of the Revenue was dismissed, and no costs were awarded in this matter.
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