2011 (9) TMI 303 - AT - Service Tax

Appellate Tribunal allows credit for Service Tax on outward transportation service.

M/s. OCL India Ltd. Versus Commissioner of Central Excise, Customs & Service Tax, BBSR-II

The Appellate Tribunal CESTAT, Kolkata allowed the appeal and stay petition, holding that the appellant is entitled to credit of Service Tax paid on ... Credit of Service Tax - outward transportation service of the goods manufactured - definition of input service provides for availability of credit in respect of service received for transportation of manufactured goods 'from the place of removal' - definition of input service is different from the definition of inputs and therefore it is enough if the activity is related to manufacture - definition of input service was amended w.e.f. 01.04.2008. From 01.04.2008 'from the place of removal' in the definition of input services has been replaced by 'up to the place of removal' - credit of Service Tax paid on goods transportation services from the place of removal would be applicable only up to 31.03.2008 and thereafter the amended definition would be applicable and has also taken the view that the amendment cannot be given retrospective effect As in the case of Parth Poly Wooven Pvt.Ltd. delivered on 06.04.2011 - Appeal allowed Issues involved:1. Eligibility for credit of Service Tax paid by outward transportation service of manufactured goods.Analysis:The judgment by the Appellate Tribunal CESTAT, Kolkata dealt with the issue of whether the Appellant is entitled to credit of Service Tax paid on outward transportation service of goods manufactured and supplied to customers. The Tribunal decided to hear the Appeal itself due to the settled nature of the issue as per previous decisions of the Hon'ble High Courts of Karnataka and Gujarat. The Tribunal waived the pre-deposit requirement and allowed the Stay Petition to proceed with the Appeal. The learned Counsel argued that a previous order in their favor had been passed by a different Commissioner for a different period, allowing the credit. However, a contrary view was taken in the impugned order, stating that the department can take a different view even if an earlier order has not been challenged. The Counsel referred to the decision of the Hon'ble Supreme Court in the case of C.K.Gangadharan v. C.I.T. to support this stance. The Counsel emphasized that the issue had been conclusively settled by the Hon'ble High Courts of Karnataka and Gujarat, which held that credit of Service Tax paid on goods transportation services from the place of removal is admissible. The definition of input service was analyzed, with attention drawn to the changes made effective from 01.04.2008, where 'from the place of removal' was replaced by 'up to the place of removal'. The Hon'ble High Courts clarified that the amended definition applies prospectively and cannot have a retrospective effect. Relying on the decisions of the High Courts, the Tribunal allowed the Appeal and Stay Petition, considering the period involved was before 01.04.2008. The judgment was pronounced and dictated in the open court.