Appeal No.E/710-711/08; ST/777/09

Arising out of Order-in-Appeal No.34 & 35/2008-CE Dated: 21.07.2008 & No.248/2009 dt.29/6/2009
Passed by the CCE (Appeals) Bangalore

Date of Decision: 09.08.2011




Appellant Rep by: Mr. Rajesh Kumar, Chartered Accountant
Respondent Rep by: Mr. M M Ravi Rajendran, JDR

CORAM: P G Chacko, Member (J)
M Veeraiyan, Member (T)

Service Tax – Eligibility of service tax paid on GTA service availed for outward transportation – CENVAT Credit of service tax paid on GTA service available for outward transportation from place of removal prior to 01.04.2008

C & F Agent's service – Eligibility of CENVAT Credit of service tax paid on C & F Agent's service – Lower appellate authority's subsequent O-I-A in favour of assessee relying on Tribunal decision in Metro Shoes 2008-IST-118-CESTAT-MUM accepted by Revenue – Earlier O-I-A of lower appellate authority which gave contrary decision to assessee set aside

Appeals allowed

Case laws referred:

Gujarat Ambuja Cements Ltd. vs. CCE, Ludhiana - ( 2007-IST-134-CESTAT-DEL )

ABB Ltd. vs. Commissioner - 2011-IST-24-HC-KAR-ST

ABB Ltd. - 2008-IST-329-CESTAT-MAD

Metro Shoes Pvt. Ltd. vs. CCE, Mumbai-I - 2008-IST-118-CESTAT-MUM

FINAL ORDER NOS.584 to 586/2011

Per: P G Chacko:

The issues and the amounts involved in these appeals are summarized below:

Appeal No.


Amounts involved


Availment of Cenvat credit on outward transportation of goods and C&F Agent service. period April, 2004 to March, 2006

Cenvat credit on outward GTA – Rs.97,227/- & Cenvat credit on C&F Agent Service – Rs.1,28,061/- + interest under 11AB + Penalty under 11AC


Availment of Cenvat credit on outward transportation of goods and C&F Agent service. Period April, 2006 to December, 2006

Cenvat credit on outward GTA – Rs.72,029/- & Cenvat credit on C&F Agent service – Rs.1,30,341/- + Penalty of Rs.10,000/-


Cenvat Credit on outward GTA. Period 1/1/2007 to 30/11/2007

Rs.88.494/- + Interest under Section 75.

2. On examination of the records and hearing both sides, we find that the first issue relates, in some cases, to CENVAT credit of the service tax paid on Goods Transport Agents Service (GTA Service) availed by the appellant for outward transportation of their final products from factory to customer's premises and, in other cases, from factory to depot/ Clearing & Forwarding Agent's premises. The lower authorities relied mainly on the Tribunal's decision in Gujarat Ambuja Cements Ltd. Vs. CCE, Ludhiana [2007 (6) STR 249 (Tri.-Del.) = ( 2007-IST-134-CESTAT-DEL ) to hold that the GTA service availed by the appellant for outward transportation of their final products in the aforesaid manner did not qualify to be 'input service' defined under Rule 2(l) of the CENVAT Credit Rules, 2004 (CCR) and hence any credit of the service tax paid on such service was not admissible to them. Ld. Chartered Accountant for the appellant has challenged the decision of the lower authorities, on the strength of the Hon'ble Karnataka High Court's judgment in ABB Ltd. Vs. Commissioner - 2011-IST-24-HC-KAR-ST wherein the Tribunal's larger Bench decision in the case of ABB Ltd. - 2008-IST-329-CESTAT-MAD to the effect that outward transportation of finished goods from the place of removal was covered by the definition of 'input service' upto 31/3/2008 was upheld by the Hon'ble High Court. After a perusal of the Hon'ble "High Court's judgment, we find that the first issue is covered in favour of the appellant by the High Court's ruling. The Hon'ble High Court held that, till the amendment (effective from 1/4/2008) of clause (ii) of Rule 2(l) of the CCR through substitution of the word 'upto' for the word 'from', transportation charges incurred by a manufacturer for clearance of final products from the place of removal stood included in the definition of 'input service'. Following the Hon'ble High Court's ruling, we hold the first issue in favour of the appellant.

3. The appellant had also availed CENVAT credit of service tax paid by C & F Agents on the service rendered by them in connection with sale of the goods manufactured by the appellant. The original authority, reiterating the view taken in the relevant show-cause notices, held that no CENVAT credit would be available on C&F Agents service as this service was rendered subsequent to the clearance of the goods from the place of removal for the sale of the goods. The appellate authority in Order-in-Appeal No.34 & 35/2008 upheld this view. However, in Order-in-Appeal No.248/2009, the appellate authority held in favour of the assessee by relying on the Tribunal's decision in Metro Shoes Pvt. Ltd. Vs. CCE, Mumbai-I [2008(10) STR 382] = 2008-IST-118-CESTAT-MUM wherein it had been held that services rendered by various service providers like C&F agents during the course of transportation of the final products from the factory of the manufacturer to their own showrooms located at various places were 'input services' for the manufacturer as these services were used by the manufacturer, directly or indirectly, in or in relation to the clearance of the final product from the place of removal. Ld. Chartered Accountant for the appellant has submitted that, on the present issue, Order-in-Appeal No.248/2009 was accepted by the Department and therefore the contra decision of the lower appellate authority on the same issue in Order-in-Appeal No.34 & 35/2008 is liable to be set aside. We have found no rebuttal of this submission. CENVAT credit on C&F agent's service was denied to the appellant by the ld. Commissioner (Appeals) in Order-in-Appeal Nos.34 & 35/2008 dt. 21/7/2008, which decision is under challenge by the assessee in the first two appeals. The appellate authority in its subsequent Order-in-Appeal No.248/2009 dt. 22/6/2009 allowed the benefit of CENVAT credit on the same service availed by the assessee and this decision of the appellate authority has not been challenged by the Revenue. In the result the first two appeals must succeed on the second issue as well.

4. The impugned orders to the extent adverse to the appellant are set aside and all the appeals are allowed.

(Operative portion of this order pronounced on conclusion of the hearing)

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