Cenvat Credit is not admissible on Goods Transport Agency Services: CESTAT [Read Order]

The Central Excise and Service Tax Appellate Tribunal (CESTAT), Mumbai held that cenvat credit is not admissible on Goods Transport Agency services used for transportation of goods from the place of removal to the buyer’s premises.

The appellant is a Government-owned corporation in the Central Public Sector Enterprise under the Ministry of Mines (India), Government of India.

During the period from October 2007 to October 2010, they availed Cenvat Credit on GTA Services for their depot transfers and sale on FOR basis, which according to them, was available as per CBEC Circular.

Accordingly, a show-cause notice dated 8.6.2011 was issued to the Appellant, proposing denial of Cenvat Credit of Rs.82,52,201/- on the aforesaid Goods Transport Agency services, since as per department it was not covered under the scope of input services as prescribed under Rule 2(l) of Cenvat Credit Rules, 2004.

Initially, the demand was Rs.82,52,201/- for the period from October 2007 to October 2010 but by the earlier Order-in-Original dated 23.8.2012 it was reduced to Rs.5,26,089/- and later on upon remand by this Tribunal, in the subsequent O-I-O which is the impugned order.

Herein, it was further reduced to Rs.2,61,459/- for the period April 2008 to October 2010 along with equal amount of penalty which it was laid down that Cenvat Credit on Goods Transport Agency (GTA) service for transport of goods from the place of removal to buyer’s premises is not admissible in view of the amendment carried out in Rule 2(l) of Cenvat Credit Rules, 2004 in the year 2008. So now the period of the dispute is from April 2008 to  October 2010 and the amount of Cenvat Credit involved is Rs. 2,61,459/- only.

The appellate tribunal comprising of Judicial Member, Ajay Sharma pronounced the order based on an appeal filed by M/s Hindustan Copper Ltd.

While relying upon the decision of the Hon’ble Supreme Court in the matter of C.C.E. & S.T. vs. Ultratech Cement Ltd in which it was laid down that Cenvat Credit on Goods Transport Agency (GTA) service for transport of goods from the place of removal to buyer’s premises is not admissible in view of the amendment carried out in Rule 2(l) of Cenvat Credit Rules, 2004 in the year 2008.