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of <h1>Appeal upheld on cenvat credit for service tax; remanded for compliance review</h1> <h3>CCE, VAPI Versus M/s ITW INDIA LTD</h3> The appeal was filed against the Commissioner (Appeals) order regarding incorrect availing of cenvat credit for service tax on outward transportation. The ... Cenvat credit - service tax paid on GTA for outward transportation – Held that:- In the definition of 'input service' the term 'upto the place of removal' is substituted by 'from the place of removal' w.e.f 01.04.2008. Matter remanded to the original adjudicating authority for denovo adjudication. Issues:1. Incorrect availing of cenvat credit for service tax on outward transportation.2. Interpretation of Rule 2(p) of the Cenvat Credit Rules, 2004.3. Applicability of the decision of the Larger Bench of the Tribunal in a similar case.4. Validity of the Commissioner (Appeals) order.5. Remand of the case for fresh adjudication.Analysis:1. The appeal was filed against the order of the Commissioner (Appeals) regarding the incorrect availing of cenvat credit for service tax on outward transportation by the assessee. The Revenue contended that the outward transportation was not directly or indirectly used in relation to the manufacture or clearance of final products. The original adjudicating authority upheld the demand and imposed penalties. However, the Commissioner (Appeals) relied on the decision of the Larger Bench in a similar case and set aside the Order-in-Original.2. The interpretation of Rule 2(p) of the Cenvat Credit Rules, 2004 was crucial in this case. The Hon'ble High Court of Karnataka had previously ruled on the issue, stating that transportation charges were included in the phrase 'clearance from the place of removal' until a specific amendment date. The Court clarified that transportation of final products to their destination need not be included under 'activities relating to business.' The Tribunal's final order was deemed legal and valid based on this interpretation.3. The decision of the Larger Bench of the Tribunal in a similar case played a significant role in this judgment. The Commissioner (Appeals) had relied on this decision to set aside the original order. The Tribunal found that the issue required a fresh look in light of the High Court's ruling. Therefore, the case was remanded to the original adjudicating authority for denovo adjudication, with the interpretation being valid only until a specified date.4. The validity of the Commissioner (Appeals) order was questioned by the Revenue in the appeal. However, the Tribunal, considering the legal interpretation provided by the High Court, found it necessary to re-examine the issue and remand the case for fresh adjudication. The appeal was disposed of accordingly, emphasizing the need for a re-computation of the demand for the relevant period.5. In conclusion, the Tribunal's judgment highlighted the importance of legal interpretations and precedents in tax matters. The case was remanded for fresh adjudication, emphasizing the need to consider the specific legal interpretations provided by higher authorities. The decision underscored the significance of clarity and adherence to legal provisions in tax disputes.(Pronounced in Court on 15.11.2011)
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