2016 (11) TMI 1375 - AT - Central Excise

Tribunal allows appeal on CENVAT credit for GTA services, stresses importance of ownership

M/s. Applicomp India Ltd. Versus Commissioner of Central Excise, Customs and Service Tax Bangalore-I

The Tribunal allowed the appeal, setting aside the rejection of CENVAT credit on Goods Transport Agency (GTA) services. The case was remanded for a fresh ... CENVAT credit - GTA services - denial on the ground that the credit availed on GTA services received was irregular - the appellant have all the documents in the form of invoices raised on the customers during the relevant period and also lorry receipts raised by the transporters on the basis of which service tax was paid and credit availed during the relevant period but the authorities below have not considered these documents to arrive at a finding as to when the ownership in the goods has taken place - is denial justified? - Held that: - This Tribunal in the appellant’s own case [2015 (10) TMI 2594 - CESTAT BANGALORE] has allowed the appeal of the appellant by way of remand on an identical issue - I allow the appeal of the appellant by setting aside the impugned order and remanding the matter to the original adjudicating authority for fresh decision after considering the documents filed by the appellant - appeal allowed by way of remand. Issues:- Appeal against rejection of CENVAT credit on GTA services- Interpretation of Rule 2(l) of CENVAT Credit Rules, 2004- Consideration of ownership in goods for availing credit- Application of circulars and judicial precedents in deciding the caseAnalysis:The appeal was filed against the rejection of CENVAT credit on Goods Transport Agency (GTA) services by the Commissioner (A) and the Order-in-Original passed by the Additional Commissioner. The appellant, engaged in manufacturing excisable goods, availed CENVAT credit on service tax paid for transporting goods to buyers' premises. The dispute arose when a show-cause notice was issued proposing to demand credit availed on GTA services as irregular. The Additional Commissioner confirmed the demand, leading to the appeal. The appellant argued that the impugned order ignored relevant circulars, judicial precedents, and the definition of Rule 2(l) of CENVAT Credit Rules, 2004. They contended that transportation costs were integral to the sale consideration, and ownership of goods remained with them until delivery. The appellant presented invoices and lorry receipts to support their position.In response, the learned AR supported the findings of the impugned order. The Tribunal, after hearing both parties and considering the arguments, allowed the appeal by setting aside the impugned order. The matter was remanded to the original adjudicating authority for a fresh decision, instructing them to consider all relevant documents provided by the appellant. The Tribunal emphasized that the law declared in previous decisions and circulars should guide the adjudicating authority in reaching a conclusion. The decision highlighted the importance of determining ownership in goods for availing CENVAT credit on GTA services and directed the appellant to submit all necessary documents for a thorough review.Overall, the judgment focused on the correct interpretation of CENVAT credit rules, the significance of ownership in goods for availing credit, and the application of circulars and judicial precedents in resolving disputes related to GTA services. The Tribunal's decision to remand the matter underscored the need for a comprehensive review of all relevant evidence and legal principles before reaching a final conclusion.