2014 (10) TMI 946 - AT - Central Excise

Tribunal permits Cenvat credit for outward transportation, diverging from Kolkata High Court stance.

Bharti Teletech Ltd. Versus CCE, Ludhiana

The Tribunal allowed the appeals, permitting the appellants to claim Cenvat credit for outward transportation from the place of removal for the period in ... CENVAT credit - input services - outward transportation service from the place of removal - Held that: - The definition of inputs service during the relevant period included in its ambit the transportation from the place of removal - In this regard Karnataka High Court judgment in the case of CCE & ST, LTU Bangalore Vs. ABB Ltd. [2011 (3) TMI 248 - KARNATAKA HIGH COURT] held that transportation charges incurred by manufacturer for clearance for final product from place of removal were included in definition of input service - appeal allowed - decided in favor of appellant. Issues: Admissibility of Cenvat credit on service tax paid for outward transportation service from the place of removal.Analysis:1. The original adjudicating authority ordered recovery of Cenvat credit along with interest and penalty, which was partially upheld by the Commissioner (Appeals) in the impugned order.2. The appellants claimed Cenvat credit for outward transportation from the place of removal for the period June 2006 to December 2006. They argued that the definition of inputs service during that period allowed such credit, citing judgments from various High Courts in their favor.3. The Tribunal considered the matter and noted that the definition of inputs service at the relevant time included transportation from the place of removal. Referring to judgments from the Karnataka and Gujarat High Courts, the Tribunal held that transportation charges incurred for clearance of final products from the place of removal were part of the input service definition until April 1, 2008, despite the Board's Circular indicating otherwise.4. Relying on the precedents set by the Karnataka and Gujarat High Courts, the Tribunal allowed the appeals, disagreeing with the view taken by the Kolkata High Court in a similar case.This judgment clarifies the admissibility of Cenvat credit on service tax paid for outward transportation from the place of removal, emphasizing the interpretation of the definition of inputs service during the relevant period and the impact of judicial precedents from different High Courts on such matters.