Tribunal allows CENVAT Credit on Courier Services under Service Tax despite 2011 amendment

The Tribunal upheld the impugned Order, dismissing the Revenue's appeal and ruling in favor of the Respondent. It held that Service Tax paid on Courier Services is eligible for CENVAT Credit for sending samples, documents, and finished goods, both before and after the 2011 amendment to the definition of Input Services. The Tribunal found that Courier Services are integrally connected to the manufacturing activity and are eligible for credit, despite not being directly related to manufacturing post-amendment.

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Issues involved:
Admissibility of CENVAT Credit of Service Tax paid on Courier Service prior to and after 01.4.2011.

Analysis:

Issue 1: Admissibility of CENVAT Credit of Service Tax paid on Courier Service
The appeal concerns the admissibility of CENVAT Credit of Service Tax paid on Courier Service before and after 01.4.2011. The Respondent, a manufacturer of excisable goods, used Courier Services for sending samples, documents, and finished goods. The Ld Advocate argued that even before 01.4.2011, credit of service tax paid on Courier Services for dispatching finished goods was considered admissible by the Hon'ble Gujarat High Court. Post the amendment to the definition of Input Services from 01.4.2011, the Ld Advocate contended that the credit on Service Tax paid on such services remains admissible as they are integrally connected to the manufacturing activity. The Ld Advocate cited cases where the Tribunal ruled in favor of assessees regarding the eligibility of CENVAT Credit for Courier Services. On the contrary, the Ld AR for the Revenue argued that Courier Services are not directly related to manufacturing activity post the 2011 amendment. The Tribunal analyzed the amended definition of Input Service and noted that certain services indirectly related to manufacturing activity but connected to the business of manufacturing remained eligible for credit. The Tribunal concluded that Courier Services for sending samples, documents, and finished goods are eligible for CENVAT Credit both before and after the 2011 amendment. The impugned Order was upheld, and the Revenue's appeal was dismissed.

In conclusion, the Tribunal ruled in favor of the Respondent, holding that Service Tax paid on Courier Services is eligible for CENVAT Credit for various purposes such as sending samples, documents, and finished goods, both before and after the amendment to the definition of Input Services from 01.4.2011.

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