Appeal granted due to limitation issue & lack of evidence for fraudulent motives.

The Tribunal allowed the appeal in favor of the appellant based on the limitation issue, emphasizing the lack of evidence supporting fraudulent motives and the reasonable belief in claiming the cenvat credit on GTA service. The appellant's contention that the service tax was eligible for cenvat credit under input service was considered reasonable, leading to the setting aside of the impugned order solely on the ground of limitation.

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Issues:
1. Disputed availment of cenvat credit on GTA Service by the appellant.
2. Justifiability of the disallowance of cenvat credit by the Department.
3. Applicability of the extended period of limitation for issuing the Show Cause Notice.
4. Interpretation of the definition of Input Service under Rule 2(l) of the Cenvat Credit Rules, 2004.

Analysis:

1. The appellant, engaged in manufacturing insulated wires and cables, availed cenvat credit of Service Tax paid on GTA Service during the disputed period. The Department disputed this credit, contending that the service was used for ex-work sale of goods, not meeting the definition of Input Service under Rule 2(l) of the Cenvat Credit Rules, 2004.

2. The ld. Advocate for the appellant argued that the appellant believed in good faith that the GTA Service tax was eligible for cenvat credit under input service, citing the ABB Ltd. case. Additionally, the appellant was not involved in suppression or fraud, invoking the judgment in Chemphar Drugs and Liniments, which states that extended limitation cannot be applied in cases of genuine interpretation of statutory provisions.

3. The ld. DR for the Revenue supported the findings of the impugned order disallowing the cenvat credit. However, the Tribunal noted that the SCN was issued beyond the normal limitation period. Referring to the ABB Ltd. case, the Tribunal held that the appellant's belief in claiming cenvat credit on GTA service was reasonable, and without evidence of fraudulent intent, the extended limitation period could not be invoked.

4. The Tribunal found that the purchase orders indicated delivery at the factory gate, with the appellant arranging transportation to the buyer's premises. As the delivery was not on FOR basis, the Service Tax on transportation did not qualify as an input service for cenvat credit. Despite upholding the denial of cenvat credit, the Tribunal ruled in favor of the appellant solely on the ground of limitation, setting aside the impugned order.

In conclusion, the Tribunal allowed the appeal in favor of the appellant based on the limitation issue, emphasizing the lack of evidence supporting fraudulent motives and the reasonable belief in claiming the cenvat credit on GTA service.

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