Cenvat credit on dealer-billed transportation charges upheld where service tax was paid and invoices supported the claim.

Cenvat credit was held admissible on service tax paid on transportation charges shown separately in the dealer's invoices, because the dealer had charged and paid the tax and the assessee relied on those invoices as documentary support. Denial of credit merely on the ground that the dealer was not the transporter was not accepted, as the invoices were treated as a sufficient basis for credit under the Cenvat credit scheme. The resulting demand, interest and penalty were set aside.

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Issues: Whether Cenvat credit of service tax paid on transportation charges charged by the dealer in the invoice was admissible to the assessee despite the objection that the dealer was not the transporter and the document was not a proper document under the Cenvat Credit Rules, 2004.

Analysis: The dealer had raised invoices for the goods supplied and separately charged transportation charges on which service tax had been paid. The credit was claimed on the strength of those invoices. Since the dealer had paid the transportation charges and the corresponding service tax, and the assessee had not directly paid service tax to the transporters, the invoice issued by the dealer constituted a sufficient basis for availing credit. The denial of credit solely on the ground that the dealer was not the transporter was not accepted.

Conclusion: Cenvat credit was admissible and the denial of credit, demand, interest and penalty were set aside in favour of the assessee.

Ratio Decidendi: Credit cannot be denied where service tax on transportation charges has been paid and the assessee relies on invoices issued by the dealer evidencing such payment, if the credit otherwise falls within the admissible credit scheme.

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