High Court grants Cenvat Credit for Service Tax on inter-unit goods transport, criticizes Tribunal's failure to consider factual distinctions.

The High Court allowed the Assessee's appeals, directing the Revenue Department to grant Cenvat Credit for the Service Tax paid on the transportation of goods between the Assessee's units. The Court distinguished the Ultra Tech Cement case, emphasizing that the amended definition of 'place of removal' allowed for a broader interpretation, encompassing scenarios where goods were further processed before sale. The Court criticized the Tribunal for not adequately considering the factual distinctions between the Ultra Tech case and the present case, ultimately ruling in favor of the Assessee.

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Issues:
- Entitlement to Input Tax Credit of Service Tax paid on transportation of excisable goods from Chennai Unit I to Jamshedpur Unit 2.
- Interpretation of the definition of 'place of removal' in CENVAT Credit Rules, 2004.
- Applicability of the decision of the Hon'ble Supreme Court in the case of Ultra Tech Cement Limited to the present case.

Analysis:
1. Entitlement to Input Tax Credit:
The Assessee appealed against the dismissal of their claim for Input Tax Credit by the CESTAT. The Assessee argued that as per the amended definition of 'Input Services,' they were entitled to claim Cenvat credit for the Service Tax paid on transporting goods from Chennai Unit 1 to Jamshedpur Unit 2. They contended that the goods were further processed at Jamshedpur Unit 2 before being sold, making it eligible for credit. The Assessee distinguished the Ultra Tech Cement case, emphasizing that it concerned transport from the seller to the buyer's premises, not between different units of the same Assessee.

2. Interpretation of 'Place of Removal':
The Revenue argued that the transport charges for moving goods between the Assessee's separate registered units were not covered under the definition of 'place of removal.' They cited Rule 2(qa) of the CENVAT Credit Rules, stating that the goods must be sold from the premises they were transported to without any change in form to qualify as 'place of removal.' The Revenue relied on the Ultra Tech Cement case to support their position.

3. Applicability of Ultra Tech Cement Case:
The High Court analyzed the Ultra Tech Cement case and concluded that it supported the Assessee's position. They highlighted that the Supreme Court's judgment focused on the transport of goods from the place of removal to the buyer's premises, not between different units of the same Assessee. The Court emphasized that the amended definition of 'place of removal' allowed for a broader interpretation, encompassing scenarios where goods were further processed before sale. The Court criticized the Tribunal for not adequately considering the factual distinctions between the Ultra Tech case and the present case. Ultimately, the Court allowed the Assessee's appeals, directing the Revenue Department to grant Cenvat Credit for the Service Tax paid on the transportation of goods between the Assessee's units.

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