2017 (11) TMI 82 - AT - Central Excise

Tribunal upholds taxpayer's right to claim CENVAT credit on transportation, emphasizing legal precedents

The Tribunal rejected the appeals filed by Revenue, upholding the eligibility of the respondent to avail CENVAT credit on outward transportation of goods ... CENAVT credit - outward Transportation of goods - subsequent reversal on the direction of the Superintendent and availment of re-credit and refund claimed for the interest paid on such reversal - Held that: - eligibility to avail CENVAT credit on service tax paid on outward transportation of the goods till 31.03.2008 is already settled in favour of the assessee and respondent herein in the case of ABB Ltd.[2011 (3) TMI 248 - KARNATAKA HIGH COURT] by the Hon’ble High Court of Karnataka. Respectfully following the said ratio, the eligibility to avail CENVAT credit having been settled in favour of the respondent herein, debits made by him were incorrect and availed the suo moto credit. Availment of credit suo moto - Held that: - The facts of the case in Sopariwala Exports [2013 (5) TMI 430 - CESTAT AHMEDABAD] are similar to the facts in this case - the issue of availing CENVAT credit either suo moto is also settled in favor of the respondent. As regards the refund of interest paid by the respondent, in the first place when appellant are eligible to avail CENVAT credit and reversed the same on the instance of the Revenue authorities along with interest, which has been paid in cash, as they are eligible for the refund of interest also. Appeal dismissed - decided against Revenue. Issues:1. Availment of CENVAT credit on outward transportation of goods.2. Reversal of CENVAT credit and refund claim for interest paid on reversal.Analysis:1. The appeals were filed by Revenue against Orders-in-Appeal related to the availment of CENVAT credit on service tax paid on outward transportation of goods during July 2005 to June 2006. The lower authorities held that the respondent was not eligible for such credit, subsequent reversal, and refund of interest paid. The first appellate authority set aside the Orders-in-Original. The department argued that the respondent could not have availed suo moto credit and the eligibility for such credit is only up to the place of removal. However, the Tribunal found that eligibility for CENVAT credit on outward transportation was settled in favor of the respondent in a previous case. The Tribunal also noted that the respondent was eligible for the refund of interest paid.2. The Tribunal held that the appeals filed by Revenue lacked merit. Firstly, the eligibility to avail CENVAT credit on outward transportation was already established in favor of the respondent based on a previous court decision. The Tribunal rejected the Revenue's challenge to the suo moto credit availed by the respondent. Secondly, regarding the refund of interest paid by the respondent, the Tribunal found that since the appellant was eligible to avail CENVAT credit and had reversed it along with interest, they were entitled to a refund of the interest paid. Therefore, the Tribunal rejected the appeals filed by Revenue, upholding the eligibility of the respondent to avail CENVAT credit and the refund of interest paid.This judgment clarifies the eligibility of a taxpayer to avail CENVAT credit on outward transportation of goods and the entitlement to a refund of interest paid on reversal of such credit. The decision highlights the importance of legal precedents in determining such eligibility and emphasizes the taxpayer's rights in availing credits and refunds in accordance with the law.