2015 (5) TMI 444 - AT - Service Tax

Tribunal Upholds Cenvat Credit for Transportation Services

CCE & ST, Meerut-II Versus Shri Rathi Steel Ltd.

The Tribunal upheld the admissibility of cenvat credit for GTA services used for outward transportation of finished goods. The Commissioner (Appeals) set ... Refund claim - GTA services - Reversal of CENVAT Credit under Protest - confirmation of the cenvat credit demand along with interest and imposition of penalty - Held that:- When the refund claim sanctioned to the respondent is consequent upon the Commissioners (Appeals) order dated 28.04.2010,which subsequently had been upheld by the Tribunal on 5.9.2012, the sanction of the refund claim is in order. - Decided against the revenue. Cenvat credit refund of ₹ 5,63,172/- for the period from May, 2008 to August, 2008 - Held that:- Commissioner (Appeals) had relied upon the Boards Circular dated 23.08.2007 clarifying that cenvat credit of service tax paid on the outward transportation of the finished goods upto the place of removal is admissible in case of sale of goods on FOR destination basis and in this regard, relying upon the judgment of the Honble Punjab & Haryana High Court in the case of Ambuja Cement Ltd. Vs. Union of India - [2009 (2) TMI 50 - PUNJAB & HARYANA HIGH COURT] and also the judgment of the Karnataka High Court in the case of ABB Ltd. (2009 (5) TMI 48 - CESTAT, BANGALORE), has held that the cenvat credit of service tax paid in respect of outward transportation of the goods upto the customers premises on FOF basis is available to the respondent for the period w.e.f. 1.4.2000. It is seen that in this regard, he has not discussed at all as to whether the Respondents sales were on FOR destination basis and if so, what is the evidence. - Matter remanded back for denovo consideration. Issues involved:1. Cenvat credit eligibility for GTA services availed for transportation of finished goods.2. Disallowance of cenvat credit by Asstt. Commissioner.3. Refund claim for reversed cenvat credit.4. Tribunal's dismissal of Revenue's appeal.5. Commissioner (Appeals) orders on refund claims.6. Challenge to Commissioner (Appeals) orders by Revenue.7. Definition of input service for outward transportation.8. Sales on FOR destination basis determination.9. Boards Circular and High Court judgments application.Analysis:Issue 1: Cenvat credit eligibility for GTA services:The Tribunal upheld the admissibility of cenvat credit for GTA services used for outward transportation of finished goods from the place of removal. The Commissioner (Appeals) set aside the Asstt. Commissioner's disallowance, and the subsequent refund claim was sanctioned based on this decision.Issue 2: Disallowance of cenvat credit:The Asstt. Commissioner initially disallowed the cenvat credit, which was later overturned by the Commissioner (Appeals) and Tribunal. The refund claims were sanctioned in line with these decisions.Issue 3: Refund claim for reversed cenvat credit:The respondent filed refund claims for reversed cenvat credit amounts, which were subsequently sanctioned by the Asstt. Commissioner. The Revenue challenged these decisions before the Commissioner (Appeals).Issue 4: Tribunal's dismissal of Revenue's appeal:The Tribunal dismissed the Revenue's appeal against the Commissioner (Appeals) decision to sanction the refund claims, citing lack of merit in the Revenue's arguments.Issue 5: Commissioner (Appeals) orders on refund claims:The Commissioner (Appeals) upheld the refund claims based on the eligibility of cenvat credit for GTA services used for transportation of finished goods.Issue 6: Challenge to Commissioner (Appeals) orders by Revenue:The Revenue challenged the Commissioner (Appeals) orders on refund claims, arguing that the evidence supporting sales on FOR destination basis was not discussed.Issue 7: Definition of input service for outward transportation:The definition of input service included services for outward transportation of finished goods up to the place of removal, making such services eligible for cenvat credit.Issue 8: Sales on FOR destination basis determination:The determination of sales being on FOR destination basis was crucial for the eligibility of cenvat credit for outward transportation services.Issue 9: Boards Circular and High Court judgments application:The application of Boards Circular and High Court judgments was essential in establishing the eligibility of cenvat credit for outward transportation services based on sales being on FOR destination basis.This detailed analysis highlights the key legal aspects and decisions involved in the judgment regarding the cenvat credit eligibility and refund claims for GTA services used in the transportation of finished goods.