2009 (8) TMI 506 - AT - Service Tax

Cenvat Credit- The Commissioner (Appeals) set aside denial of credit of Rs. 1, 81, 264 on outward transport service against which Revenue filed the appeal. In the light of the decision of ABB Ltd. v. CCE & 2009 -TMI - 34139 - CESTAT BANGALORE held that- assessee eligible to avail credit.

Summary

Issues:
1. Denial of credit of Rs. 94,768 based on TR-6 challan for GTA service prior to 16-6-2005.
2. Denial of credit of Rs. 1,81,264 on outward transport service.

Analysis:

Issue 1: Denial of credit of Rs. 94,768 based on TR-6 challan for GTA service prior to 16-6-2005:
The Commissioner (Appeals) upheld the inadmissibility of the credit, which was challenged by the assessee. The learned Counsel argued that sub-clause (v) of clause (a) of sub-rule (1) of Rule 2 of Cenvat Credit Rules, 2004 allowed the credit based on TR-6 challan for GTA service even before 16-6-2005. The Tribunal referred to previous decisions supporting the validity of TR-6 challan as a duty paying document for tax paid on GTA service. The Tribunal emphasized that the denial of credit was unjustified, citing consistent views on the matter.

Issue 2: Denial of credit of Rs. 1,81,264 on outward transport service:
The Revenue appealed the setting aside of the denial of credit on outward transport service. The dispute centered on whether outward transportation beyond the place of removal qualified as an "input service" under the Cenvat Credit Rules. The learned D.R. argued that such transportation was not covered within the definition of "input service." However, the assessee relied on a Larger Bench decision in the case of ABB Ltd. v. CCE & ST, which interpreted the definition of "input service" broadly to include services for outward transportation beyond the factory gate. The Tribunal, in line with the Larger Bench decision, held that services for outward transportation of final products from the place of removal should be treated as an input service, allowing the assessee to avail credit on outward transport service.

In conclusion, the appeal filed by the assessee was allowed, granting credit for both the TR-6 challan for GTA service and the outward transport service. On the other hand, the appeal filed by the Revenue was rejected based on the detailed analysis and interpretation of relevant legal provisions and precedents.