A Division Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), directed re adjudication as Cenvat Credit of Service Tax paid on outward GTA Services was availed.
The appellant, Sanghi Industries are manufacturers of Cement and had availed the Cenvat Credit of Service tax paid on outward GTA services used for transportation of their finished goods from their factory to customer’s premises i.e beyond the place of removal, during the period from October 2015 to September 2016, which is alleged to be not proper in view of definition of “input service” as given at Rule 2(l) of the Cenvat Credit Rules, 2004.
Any service availed after clearance of finished goods beyond the place of removal is not an “input service” and therefore, the appellant is not eligible to avail cenvat credit of service tax paid on outward GTA service. Show Cause Notices were issued to the appellant for recovery of wrongly availed cenvat credit along with interest, under Rule 14 of the Cenvat Credit Rules, 2004 and proposing imposition of penalty under Rule 15 of the Cenvat Credit Rules, 2004.
The said show cause notice was adjudicated by the adjudicating authority, who dropped the proceedings. Aggrieved by the said order, the revenue filed appeal before the Commissioner (Appeals) who after considering the submissions of the parties allowed the appeal of revenue and hence the present appeal.
Jigar Shah, Counsel appearing for the appellant submitted that the Commissioner (Appeals) failed to appreciate that the definition of input service includes all the services availed up to the “place of removal” and the Commissioner also failed to consider that all the conditions specified in circular No 97/8/2017 dated 23.08.2007 and circular No. 988/12/2014-CX dated 20.10.2014 are satisfied hence credit on outward transportation is admissible.
The Coram consisting of Ramesh Nair, Judicial Member and Raju, Technical Member observed that “The Commissioner (Appeals) did not deal properly with these documents/ details and facts submitted by the Appellant before him in the impugned order. Therefore, the case needs to be reconsidered by the Commissioner (Appeals) to decide the appeal a fresh after considering the said documents and vital facts and Board Circulars.”
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