Cenvat credit on outward freight through GTA services was admissible for the pre-01.04.2008 period under the then rules.

Under Rule 2(l) of the Cenvat Credit Rules, 2004 as applicable up to 01.04.2008, service tax paid on GTA services used for outward transportation of final products qualified as input service credit. The cited precedent had already settled that such outward freight credit was admissible for the pre-01.04.2008 period, so the denial of credit for that period was unsustainable. The later period was not disputed because the credit had already been reversed.

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Issues: Whether cenvat credit of service tax paid on outward freight or GTA services used for transportation of final products is admissible for the period prior to 01.04.2008.

Analysis: The credit claim was examined in the light of the definition of input services under Rule 2(l) of the Cenvat Credit Rules, 2004 as applicable up to 01.04.2008. The relied upon precedent had already settled that service tax paid on GTA services for outward transportation of final products is eligible for credit for the relevant pre-01.04.2008 period. The later period was not in dispute, as the credit had already been reversed by the appellant.

Conclusion: Cenvat credit on outward freight or GTA services was allowable for the period prior to 01.04.2008, and the impugned denial was unsustainable.

Final Conclusion: The appeal succeeded and the order denying credit was set aside.

Ratio Decidendi: Service tax paid on GTA services used for outward transportation of final products qualified as input service credit for the period prior to 01.04.2008 under the then applicable Cenvat Credit Rules.

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