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Appellant wins appeal for Cenvat Credit on transportation and repair costs at daughter station. The appellant, a public sector undertaking manufacturing petroleum products, appealed against the denial of Cenvat Credit on transportation of gas to ...
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Provisions expressly mentioned in the judgment/order text.
Appellant wins appeal for Cenvat Credit on transportation and repair costs at daughter station.
The appellant, a public sector undertaking manufacturing petroleum products, appealed against the denial of Cenvat Credit on transportation of gas to daughter station and repair and maintenance of compressors at the daughter station. The judge ruled in favor of the appellant, allowing them to claim Cenvat Credit on 'Outward Transportation Service' up to the daughter station and on 'Repair and Maintenance Service' of compressors at the daughter station. The impugned order was set aside, and the appeal was allowed.
Issues: 1. Denial of Cenvat Credit on 'Outward Transportation' and 'Repair and Maintenance' of compressors at daughter station.
Analysis: The appellant, a public sector undertaking manufacturing petroleum products, appealed against the denial of Cenvat Credit on transportation of gas to daughter station and repair and maintenance of compressors at the daughter station. The Revenue contended that the appellant was not entitled to credit for transportation beyond the place of removal and for repair and maintenance services. The appellant argued that they should be allowed credit as they bear the cost of transportation to the daughter station and are duty-bound to maintain compressors at the daughter station.
The appellant justified their entitlement to Cenvat Credit on 'Outward Transportation Service' by pointing out that the transportation cost to the daughter station was included in the excisable value of goods sold at the daughter station. They relied on the decision in the case of Lafarge India Pvt Ltd to support their claim. The appellant also argued that maintaining compressors at the daughter station was crucial for selling gas to customers and, therefore, the 'Repair and Maintenance Service' of compressors at the daughter station should be considered an Input Service, citing the decision in the case of Parry Engg & Electronics P Ltd.
After hearing both parties, the judge found in favor of the appellant. It was held that the appellant was entitled to Cenvat Credit on 'Outward Transportation Service' up to the daughter station as it was considered the place of removal. Additionally, the judge ruled that the appellant could claim credit for 'Repair and Maintenance Service' of compressors at the daughter station since maintaining proper gas pressure was essential for their manufacturing activity and sale of gas to customers. Consequently, the impugned order was set aside, and the appeal was allowed.
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