2011 (9) TMI 129
X X X X Extracts X X X X
X X X X Extracts X X X X
....re manufacturers of excisable goods falling under Chapter 72 and 84 of the Central Excise Tariff. They availed CENVAT credit of service tax paid on goods transportation service in respect of outward transportation of goods from their factory to the customer s premises. The department sought to deny the credit on the same on the ground that outward transportation service cannot be considered as an input service for the appellant for the reason that the appellant has not included the freight amount paid to GTA in the assessable value of the final product for discharging duty. Accordingly, the department disallowed CENVAT credit amounting to Rs.1,76,314/- for the period April to June 2007, Rs.1,42,007/- for the period July to September 2007, R....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d therefore, CENVAT credit on such services is eligible to be taken by the manufacturer. The larger bench has further held that for admissibility to credit on outward transportation, there is no requirement that the cost of freight should enter into the transaction value of the manufactured goods. The Larger Bench also held that service tax being in the nature of consumption tax, if CENVAT credit is disallowed on outward transportation, it becomes a tax on business rather than a tax on consumption. The above decision of the Larger Bench was upheld by the Hon'ble High Court of Karnataka in CCE vs. ABB Ltd. 2011 (23) STR 97 wherein the Hon'ble High Court held that the order passed by the Tribunal is legal and valid till 1.4.2008 when the defi....