Cenvat credit on GTA transport before 01.04.2008 was allowable, and new objections beyond the show-cause notice failed.

For the period before 01.04.2008, GTA service tax credit on transportation of finished goods from the factory to depots and customers was admissible because the then-existing input service definition covered services used for clearance of final products from the place of removal, and the amendment effective from 01.04.2008 did not apply retrospectively. The concept of place of removal, including depots and branches, supported credit for transport to the first point of delivery. Credit also could not be denied on the basis of alleged lack of proof of reverse-charge payment where that objection was not raised in the show-cause notice, since adjudication cannot travel beyond the notice. The impugned order was set aside and consequential relief followed.

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Issues: (i) Whether Cenvat credit of service tax on GTA services used for transportation of finished goods from the factory to depots and customers was admissible for the period prior to 01.04.2008; (ii) Whether denial of credit on the ground of want of documentary evidence regarding payment of service tax on reverse charge basis could sustain when that ground was not part of the show-cause notice.

Issue (i): Whether Cenvat credit of service tax on GTA services used for transportation of finished goods from the factory to depots and customers was admissible for the period prior to 01.04.2008.

Analysis: For the relevant period, the definition of input service covered services used by a manufacturer for clearance of final products from the place of removal. The amendment brought in by Notification No. 10/2008-CE (N.T.) dated 01.03.2008, effective from 01.04.2008, substituted the expression and did not govern the earlier period. Transportation from the factory to the first point of delivery, whether depot or customer, fell within the expression as understood for that period. The statutory concept of place of removal, including depots and branches, also supported the assessee's claim.

Conclusion: Credit on GTA transportation for the relevant period was admissible and the denial was unsustainable.

Issue (ii): Whether denial of credit on the ground of want of documentary evidence regarding payment of service tax on reverse charge basis could sustain when that ground was not part of the show-cause notice.

Analysis: The notice did not dispute payment of service tax on reverse charge basis. A denial founded on a new factual basis not raised in the notice could not be sustained. The adjudicatory authorities were bound by the scope of the notice and could not travel beyond it.

Conclusion: The denial on this ground was not sustainable.

Final Conclusion: The impugned order was set aside and the assessee was granted consequential relief.

Ratio Decidendi: For the period prior to the 01.04.2008 amendment, GTA services used to transport finished goods from the factory to the first point of delivery fell within input service as transportation from the place of removal, and credit cannot be denied on a ground not raised in the show-cause notice.

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