Cenvat Credit available on Service Tax paid on Transportation of Vehicles: CESTAT [Read Order]

Cenvat Credit provisional assessment - Service Tax - Cenvat Credit - Taxscan

While allowing the appeal of appellant by way of remand, Delhi bench of CESTAT held that cenvat credit is available on service tax paid on transportation of the vehicles. The bench comprising single judicial member Ms. Archana Wadhwa heard the case of M/s Modern Machinery Stores against the impugned order of CE, Alwar.

In the instant case, the Appellant, Modern Machinery Stores engaged in the business of sale and purchase of motor vehicles manufactured by their manufacturers. The appellant are paying service tax on inward freight paid by them for the transportation of said vehicles from the premises of manufacturers to the premises of the appellants and are availing input service credit under Goods Transport Agency Services.

However, the Revenue entertained a view that credit of service tax paid on transportation of vehicles is not admissible since it belongs to trading activities. Thereafter, proceedings initiated resulted in denial of cenvat credit.

Being aggrieved, the appellant approached to the Appellate tribunal on an appeal and contended that in the light of decision in CCE, Tirupathi vs. Shariff Motors wherein held that credit of service tax for transportation of the vehicles from the factory premises to the showrooms were allowed. In order to press the decision Appellant cited another cases too.

Finally, the Judicial Member noted that “In rejoinder learned Advocate submits that the said decision is for the period after 01/04/211 and for the period prior to 01/04/2011, the Tribunal had disallowed the credit only in respect of imported cars and has observed that the credit availed in respect of indigenous vehicle would be available. In as much as the effect of the said decisions has not been considered by Commissioner (Appeals), I deem it fit to set aside the impugned orders and remand the matters to Appellate Authority for reconsideration”.

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