GTA service credit need not be reversed when inputs are cleared as such under Cenvat credit rules.

Where inputs are cleared as such under Rule 3(5) of the Cenvat Credit Rules, 2004, credit taken on related Goods Transport Agency services is not required to be reversed. The Tribunal treated the contrary cited decision as per incuriam and preferred the High Court view supporting non-reversal. The operative principle is that GTA credit need not be reversed merely because the inputs are cleared without use, and the issue was decided in favour of the assessee.

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Issues: Whether credit availed on Goods Transport Agency services was required to be reversed when the inputs were cleared as such under Rule 3(5) of the Cenvat Credit Rules, 2004.

Analysis: The Tribunal found that the cited decision holding otherwise was per incuriam and did not apply to the facts. Reliance was placed on the contrary High Court view that no reversal of credit of GTA services is required where inputs are cleared as such.

Conclusion: Reversal of credit on GTA services was not required; the issue was answered in favour of the assessee.

Ratio Decidendi: Where inputs are cleared as such, credit taken on related GTA services is not required to be reversed under Rule 3(5) of the Cenvat Credit Rules, 2004.

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