Tribunal Allows CENVAT Credit on GTA Services for Outward Transportation

The Tribunal held that services availed for outward transportation of final products qualify as 'input service' for CENVAT credit. Following the Larger Bench decision and High Court ruling, the Tribunal allowed the appeals of the assessees, affirming their entitlement to claim CENVAT credit on GTA services for outward transportation of products before 31.3.2008. The department's appeals were dismissed in light of the settled position post the High Court's decision.

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Issues:
- Whether the service availed for outward transportation of final products should be treated as 'input service' for CENVAT credit.
- Applicability of the Larger Bench decision and High Court ruling on the matter.

Analysis:
1. The appeals before the Appellate Tribunal involved the question of whether the service availed for outward transportation of final products should be considered as 'input service' for CENVAT credit under Rule 2(l) of the CENVAT Credit Rules, 2004. This issue had been settled in favor of the assessee by a Larger Bench decision of the Tribunal through Miscellaneous Order No.276-282/2009 dated 18.5.2009. The Larger Bench had ruled that such services are eligible for CENVAT credit. However, individual appeals were remanded back to the present Bench for final disposal after the Larger Bench decision. Additionally, the Hon'ble High Court, in a batch of appeals filed by the department, upheld the decision of the Larger Bench in the case of Commissioner vs. ABB Ltd.: 2011 (23) STR 97 (Kar.), specifically allowing CENVAT credit for outward transportation of final products up to 31.3.2008.

2. One of the appeals considered by the Larger Bench, namely Appeal No.E/859/2006 (CCE, Hyderabad vs. The India Cement Ltd.), was addressed by the present Bench in light of the High Court's judgment in the ABB Ltd. case. The Tribunal disposed of this appeal through a final order dated 18.6.2012, aligning with the High Court's ruling on the matter.

3. Considering the settled position post the High Court's decision, the Tribunal found that the ruling of the High Court applied equally to the facts of the cases under consideration. After hearing both sides, the Tribunal concluded that the assessees were indeed entitled to claim CENVAT credit on GTA services utilized for the outward transportation of their final products from their factories to customers' premises before 31.3.2008. Consequently, the appeals filed by the assessees were allowed, while those by the department were dismissed.

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