2020 (4) TMI 353 - AT - Central Excise

CENVAT Credit - input services - GTA Service for transportation of petroleum products from the refinery to the depot and from the depot to the customers premises - place of removal - period December 2006 to March 2008 - denial of credit on the ground that such transportation service should not be considered as input service in terms of the definition provided under Rule 2(l) of the Cenvat Credit Rules, 2004 - HELD THAT - The period of dispute involved in this case is from December 2006 to March 2008. The case of the appellant falls under the pre-amended definition of input service contained in Rule 2(l) ibid. Under the said definition both in the main part as well as in the inclusion part, it has been provided that clearance of final product from the place of removal and outward transportation up to the place of removal should be considered as input service for availment of the Cenvat credit of Service Tax paid on the GTA service for transportation of the final product. Analysing the provisions of amended Rule 2(l) ibid, the Hon ble Apex Court in the case of COMMISSIONER OF CUSTOMS CENTRAL EXCISE AND SERVICE TAX, GUNTUR VERSUS M/S. THE ANDHRA SUGARS LTD. 2018 (2) TMI 285 - SUPREME COURT have extended the Cenvat benefit to the assessee, holding that such transportation service availed by the assessee is confirming to the definition of input service. There are no merits in the impugned order, in so far as it has confirmed the Cenvat demand of ₹ 55,95,563/- and the resultant interest and penal liabilities - appeal allowed - decided in favor of appellant.

Summary

Issues:
Denial of Cenvat credit on GTA Service for transportation of petroleum products from refinery to depot and customers' premises.

Analysis:
The appeal was against an order passed by the Commissioner of Central Excise regarding the denial of Cenvat credit on Service Tax paid for transportation services. The dispute revolved around whether transportation services for moving petroleum products from the refinery to the depot and then to customers' premises qualified as input services under Rule 2(l) of the Cenvat Credit Rules, 2004.

The appellant did not contest a portion of the Service Tax demand but challenged the remaining amount, arguing that both the refinery and the depot should be considered as "place of removal," allowing them to claim Cenvat credit on the GTA services. The appellant cited judgments of the Hon'ble Supreme Court to support their position.

The Revenue's Authorized Representative supported the findings of the impugned order, leading to a hearing where both sides presented their arguments, and the records were examined. The period of dispute was from December 2006 to March 2008, falling under the pre-amended definition of input service in Rule 2(l) of the Cenvat Credit Rules, 2004.

The Tribunal analyzed the provisions of the amended Rule 2(l) and referred to a Supreme Court judgment to determine that transportation services for moving the final product from the place of removal were considered as input services eligible for Cenvat credit. Consequently, the Tribunal found no merit in the impugned order confirming the Cenvat demand, interest, and penal liabilities, and allowed the appeal in favor of the appellant.