2015 (11) TMI 473 - AT - Service Tax

Tribunal rules in favor of cement manufacturer in cenvat credit denial case

M/s Ambuja Cement Versus Commissioner of Central Excise-Bhavnagar

M/s Ambuja Cement Versus Commissioner of Central Excise-Bhavnagar - TMI Issues:1. Denial of cenvat credit on GTA services.2. Denial of cenvat credit based on ISD invoices.3. Denial of credit on other services used beyond the place of removal.Analysis:Issue 1: Denial of cenvat credit on GTA servicesThe appellant, a cement manufacturer, was denied cenvat credit on GTA services. The appellant argued citing the decision of the Hon'ble Gujarat High Court in a similar case that denial of cenvat credit on GTA services cannot be sustained. The Tribunal referred to the decision in the case of ABB Ltd vs Commissioner and held that GTA services used for transportation of finished goods up to the place of delivery of the buyer are eligible for input service credit. The Tribunal also noted that the Hon'ble Gujarat High Court dismissed the appeal filed by the Revenue in a similar case, thereby ruling in favor of allowing cenvat credit on GTA services. Consequently, the denial of cenvat credit on GTA services was not upheld.Issue 2: Denial of cenvat credit based on ISD invoicesThe denial of cenvat credit based on ISD invoices issued by another unit of the appellant, GajAmbuja Cement Muldwaraka, was contested. The Revenue argued that GajAmbuja Cement Muldwaraka is a separate unit and cannot issue ISD invoices to the appellant. However, upon examination of the records, it was found that both GajAmbuja Cement Muldwaraka and the appellant were units of Gujarat Ambuja Cement Ltd. The Tribunal referred to a previous case involving Castrol India Ltd and held that the denial of cenvat credit based on ISD invoices issued by GajAmbuja Cement Muldwaraka was not sustainable. The appellant was deemed to have rightly availed the credit on the basis of ISD invoices, and the denial of cenvat credit on this issue was set aside.Issue 3: Denial of credit on other services used beyond the place of removalThe adjudicating authority had denied credit on certain services, alleging that they were used beyond the place of removal. The Tribunal referenced a decision by the Hon'ble Bombay High Court in a similar case and concluded that there was no evidence to suggest that the services were not used in relation to the appellant's business. Therefore, the denial of input service credit on these services was deemed unjustified. Consequently, the impugned order was set aside, and the appeal filed by the appellant was allowed.In conclusion, the judgment favored the appellant by overturning the denial of cenvat credit on GTA services, ISD invoices, and other services used beyond the place of removal, based on legal precedents and the specific circumstances of the case.