2016 (7) TMI 1080 - HC - Service Tax

High Court Upholds CENVAT Credit for GTA Services, Emphasizing Factual Findings

The Commissioner of Central Excise Service Tax Bengaluru-IV, Versus Ultra Tech Cement Ltd.

The High Court dismissed the appeal, affirming the Tribunal's decision that the appellant met circular requirements for CENVAT credit on service tax for ... CENVAT Credit - whether circular is binding upon the revenue - service tax on GTA service availed by the appellant for outward transportation of the goods from the factory to the customer - any assessee/party may agitate binding effect of the circular but it would not lie in the mouth of the Department-appellant herein to contend that the circular is not binding. Under the circumstances, we do not find that merely because the matter is carried before the Apex Court against the decision of the Calcutta High Court, there would be any case for consideration, on the contrary, no substantial questions of law would arise since the availment of CENVAT credit is expressly made so permissible by the circular issued by the competent authority and the appellate authority having found that all conditions of the circular were satisfied. - Decided against the revenue. Issues:1. Compliance with circular requirements not examined by Tribunal.2. Availability of CENVAT Credit on service tax for GTA services.3. Interpretation of circular's binding effect.Compliance with Circular Requirements:The appellant contended that the Tribunal failed to examine whether the circular requirements were met. Specifically, the appellant argued that CENVAT Credit should be available on service tax for GTA services used for outward transportation of goods, a matter not addressed by the Tribunal. The appellant emphasized that even if the circular was deemed acceptable, the Tribunal should have remanded the case instead of dismissing the appeal outright. The appellant referred to a decision of the Calcutta High Court, highlighting that rules cannot be altered by a circular. However, the appellate authority found that the appellant had satisfied all conditions of the circular, indicating ownership of goods, bearing risk during transit, and freight charges being an integral part of the goods' price.Availability of CENVAT Credit:The Tribunal's order primarily focused on the availment of CENVAT credit for service tax paid on GTA services used for transporting goods from the appellant's factory to the customer's premises. The appellate authority's factual findings on this matter were not contested during the appeal. The Tribunal confirmed that CENVAT credit on service tax was indeed available, and as such, the finding of fact was considered conclusive, especially since it was not challenged before the Tribunal. The High Court noted that such factual findings fall outside the scope of judicial scrutiny when limited to substantial questions of law.Interpretation of Circular's Binding Effect:Regarding the interpretation of the circular's binding effect, the High Court emphasized that any party could challenge the circular's binding nature, but it was not appropriate for the Department to argue against its binding effect. The Court highlighted that the availment of CENVAT credit was explicitly permitted by the circular, and since the appellate authority confirmed compliance with all circular conditions, no substantial questions of law arose. The Court concluded that there was no basis for interference in the matter, especially considering the absence of substantial legal issues.In summary, the High Court dismissed the appeal, emphasizing that the appellant had satisfied the circular requirements, including ownership of goods, risk-bearing during transit, and integration of freight charges into the goods' price. The Court upheld the Tribunal's decision on the availability of CENVAT credit and noted that the factual findings were conclusive and not subject to further challenge. The Court also clarified the binding effect of the circular and highlighted the lack of substantial legal issues warranting interference in the case.