Tribunal allows CENVAT credit on service tax for freight, dismissing Revenue's appeal

The Tribunal upheld the Commissioner (Appeals) order allowing respondents to claim CENVAT credit on service tax paid on freight for outward transportation. Relying on precedents from the Karnataka and Gujarat High Courts, the Tribunal dismissed the Revenue's appeal, emphasizing that the Calcutta High Court decision cited by the Revenue only granted temporary stay. The Tribunal found the decisions supporting CENVAT credit before April 1, 2008, applicable, leading to the dismissal of the Revenue's appeal and addressing the respondent's cross-objection.

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Issues involved:
Whether the respondents are eligible for CENVAT credit on service tax paid on freight for outward transportation from the place of removal during January 2005 to June 2007.

Analysis:

The Revenue filed an appeal against the Commissioner (Appeals) order that set aside the adjudication order. The issue at hand was the eligibility of the respondents to avail CENVAT credit for service tax paid on freight for outward transportation during a specific period. The Revenue relied on a decision by the Hon'ble Calcutta High Court, while the respondent's counsel cited judgments from the Hon'ble Karnataka High Court and the Hon'ble Gujarat High Court.

The Tribunal noted that the Hon'ble Karnataka High Court, in a case involving ABB Ltd., held that CENVAT credit is permissible on service tax paid on GTA service before April 1, 2008. Similarly, the Hon'ble Gujarat High Court also supported this view. The Tribunal found these decisions directly applicable to the current case. It highlighted that the decision from the Hon'ble Calcutta High Court, as referenced by the Revenue, only granted temporary stay.

Based on the above discussion and following the precedents set by the Hon'ble Karnataka High Court and the Hon'ble Gujarat High Court, the Tribunal found no fault in the Commissioner (Appeals) order. Consequently, the appeal by the Revenue was dismissed, and the respondent's cross-objection was addressed.

This judgment provides a clear analysis of the eligibility of CENVAT credit on service tax paid on freight for outward transportation, referencing relevant decisions from different High Courts to support the final decision reached by the Tribunal.

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