2009 (7) TMI 16 - AT - Service Tax

Appellate Tribunal Allows Credit for Service Tax on Transportation of Goods

The Appellate Tribunal CESTAT, New Delhi ruled in favor of the appellants, allowing them to avail credit for service tax paid on transportation of goods. ... Cenvat Credit of Service Tax Paid on GTA Service - to inward transportation and also on outward supply from their factory to their branches and other units - held that the services availed by a manufacturer for outward transportation of final products from the place of removal should be treated as an input service in terms of Rule 2(1)(ii) of the CENVAT Credit Rules, 2004 and thereby enabling the manufacturer to take credit of the service tax and paid on the value of such services – Larger Bench Decision in the matter of ABB Ltd. vs. CCE, Bangalore – [2009 -TMI - 34139 - CESTAT, BANGALORE] has been followed. The Appellate Tribunal CESTAT, New Delhi, ruled in favor of the appellants in a case involving the availing of credit for service tax paid on transportation of goods. The appellants were denied the credit and penalized by the original authority, a decision which was upheld by the Commissioner (Appeals). The appellants argued that a similar issue had been decided in favor of the assessee by the Larger Bench of the Tribunal and cited a relevant High Court decision. The Tribunal found in favor of the appellants, citing the decision of the Larger Bench that services availed for outward transportation of final products should be treated as an input service, allowing the manufacturer to take credit for the service tax paid on such services. As a result, the impugned orders were set aside and both appeals were allowed. The judgement was delivered by Mr. P.K. Das, Member (Judicial) at the Appellate Tribunal CESTAT, New Delhi. The case citation is 2009 (7) TMI 16 - CESTAT, New Delhi. Shri Rupender Singh appeared for the respondents, while Shri Iskitkhar Baig represented the Revenue. The order was dictated and pronounced in Open Court.