2018 (1) TMI 469 - AT - Central Excise

Tribunal remands service tax credit dispute, orders reevaluation.

The Tribunal allowed the appeals by way of remand, setting aside the orders dropping the demand of reversal of cenvat credit of service tax, interest, and ... Admissibility of Cenvat credit on courier services - Input service definition under Cenvat Credit Rules - Distinction between courier services and goods transport agency services on facts - Remand pending decision of a higher courtAdmissibility of Cenvat credit on courier services - Input service definition under Cenvat Credit Rules - Remand pending decision of a higher court - Whether the cenvat credit of service tax on courier services used for despatch of finished goods from the factory (place of removal) to the buyer's premises is admissible or requires fresh adjudication in view of a pending decision in a related matter before the Hon'ble Apex Court. - HELD THAT: - The Tribunal observed that the question before the Hon'ble Apex Court concerns admissibility of credit on input GTA services for despatch from the manufacturer's factory to the buyer's premises and that the present dispute involves input credit of courier services for despatch from the factory gate to the buyer. Noting that the definition of 'input service' under the Cenvat Credit Rules places such services on the same footing, the Tribunal distinguished earlier decisions relied upon by the respondent as not being specifically concerned with courier services used for despatch from the place of removal. Having regard to a recent Tribunal order remanding disputes in similar facts and the pendency of the appeal before the Apex Court in CCE vs ABB Ltd., the Tribunal concluded that the impugned orders should be set aside and the matters remitted to the adjudicating authority for fresh consideration and appropriate orders after the Apex Court decides the issue in ABB Ltd. [Paras 5, 6]Impugned orders set aside and matters remanded to the adjudicating authority to decide admissibility of cenvat credit on courier services after the Hon'ble Apex Court's decision in the ABB Ltd. matter.Final Conclusion: Revenue appeals allowed by way of remand; cross objections disposed of. The adjudicating authority is directed to decide the issue afresh after the Hon'ble Apex Court's decision in the ABB Ltd. matter. Issues: Appeal against dropping demand of reversal of cenvat credit of service tax, interest, and penalty imposition.Analysis:1. The Revenue filed appeals against the Commissioner (Appeals) order dropping the demand of reversal of cenvat credit of service tax, interest, and penalty against the company. The Revenue argued that the company availed cenvat credit for courier services beyond the place of removal, which they claimed was inadmissible. They referred to a dispute regarding GTA services, pending before the Hon'ble Apex Court, and requested a remand for a decision post the Apex Court's judgment in the ABB Ltd. case.2. The respondents' counsel resisted, contending that the issue before the Hon'ble Apex Court pertained to GTA services, not courier services. They cited precedents to support the availability of input service credit for courier services. The Tribunal examined the submissions and noted the distinction between the issues related to GTA services and courier services in the current case.3. The Tribunal observed that the dispute in question concerned the admissibility of credit for services used in dispatching goods from the factory gate to the buyer's premises. They emphasized that both GTA services and courier services were integral to the input service credit under the Cenvat Credit Rules. The Tribunal distinguished previous cases related to courier services and directed a remand to the adjudicating authority for further consideration post the Apex Court's decision in the ABB Ltd. case.4. Based on the analysis, the Tribunal allowed the appeals by way of remand, setting aside the impugned orders and remanding the matters for the adjudicating authority to address and decide on the issues after the Hon'ble Apex Court's ruling in the ABB Ltd. case. The cross objections were also disposed of during the judgment pronouncement on 05/12/2017.