Tribunal grants input service credit on transportation and manpower supply services, citing Circular & case law

The Tribunal allowed the appeal, setting aside the impugned order that denied input service credit on outward transportation service and manpower supply service. Relying on Circular No. 97/08/2007, the Tribunal held that the appellants met the conditions for credit entitlement, including transportation service up to the port and invoiced bonus and lunch allowances. Citing relevant case law, the Tribunal concluded that the appellants were eligible for input service credit on both services, granting consequential relief.

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Issues:
1. Denial of input service credit on outward transportation service.
2. Denial of input service credit on manpower supply service.

Analysis:
1. The appellants challenged the impugned order denying input service credit on outward transportation service and manpower supply service. The Revenue contended that input service credit for transportation service is only available up to the place of removal, and post-31.3.2008, credit beyond the factory was not permissible. Similarly, the Revenue argued that bonus and lunch allowances were not part of manpower services, thus not eligible for input service credit.

2. The appellants, relying on Board's Circular No.97/08/2007, asserted their entitlement to input service credit for outward transportation service up to the port as per the sale agreement terms. They also claimed credit for bonus and lunch allowances provided to employees by the manpower supplier, citing the decision of the Hon'ble High Court of Bombay in the case of Ultra Tech Cement Ltd.

3. The Tribunal considered the arguments from both sides. Despite the change in the definition of input service credit post-1.4.2008, the Tribunal held that as per Circular No. 97/08/2007, if the conditions were met, the appellant was entitled to credit. The Tribunal noted that the goods were supplied on CIF, FOB, or DDU basis, meeting the circular's first condition. Additionally, the Tribunal found that bonus and lunch allowances were invoiced by the manpower supplier, making the appellants service recipients eligible for input service credit.

4. Citing the decision of the Hon'ble High Court of Punjab & Haryana in the case of Ambuja Cements Ltd. vs. Union of India and the Hon'ble High Court in the case of Ultra Tech Cement Ltd., the Tribunal concluded that the appellants fulfilled the conditions for input service credit on both outward transportation service and manpower supply service. Therefore, the impugned order was set aside, and the appeal was allowed with consequential relief, if any.

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