Input service credit allowed for outward transportation of goods, following Karnataka High Court precedent

The appellants were granted input service credit on GTA service after the Judge referenced a precedent from the Hon'ble Karnataka High Court, establishing that outward transportation of goods qualifies for such credit as it contributes to the assessable value. The appeal was successful, overturning the denial of input service credit and providing any required relief.

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Issues:
- Denial of input service credit on GTA service under Rule 2(l) of Cenvat Credit Rules, 2004.

Analysis:
The case involved the denial of input service credit to the appellants for GTA service, contending that such service did not fall within the definition of input service as per Rule 2(l) of Cenvat Credit Rules, 2004. The Respondent argued that the appellants were not entitled to input service credit for outward transportation of goods, as it was considered an expenditure related to manufacturing goods sold on FOR basis and at the factory gate. The Respondent reiterated the impugned order, emphasizing the ineligibility of input service credit on GTA service.

Upon examination of the show cause notice and considering the arguments presented, the Judge noted the settled position on the matter. Referring to a judgment by the Hon'ble Karnataka High Court in the case of ABB Ltd., where it was held that input service credit on outward transportation of goods is permissible as it forms part of the assessable value. Drawing from this precedent, the Judge concluded that the service provided by GTA was indeed covered by the decision of the Hon'ble Karnataka High Court in the case of ABB Ltd. Consequently, the appellants were deemed entitled to input service credit on GTA service. The appeal was allowed, setting aside the impugned order and providing any consequential relief deemed necessary.

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