The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai bench has allowed CENVAT credit to India Cements Ltd., on the service tax paid on outward transportation from the place of removal up to the buyers’ premises/dealers for the period up to 31.03.2008.
On verification of the records of the appellant, India Cements Ltd, the department observed that they were availing CENVAT credit on the service tax paid on freight charges for the outward transportation of finished products up to the buyers’ premises as well as the dealers. The department was of the view that in terms of the definition of “input service”, as it stood then, will not apply to the outward transportation of goods beyond the place of removal i.e. up to the premises of the customer/dealers and that the credit is not eligible. The authority, further confirmed the demand, interest, and imposed penalty. Against this, the appellants had filed appeals before the Tribunal.
In the earlier round, the Tribunal relied upon the decision of the High Court of Karnataka in the case of CCE & Service Tax, Bengaluru Vs. ABB Ltd, and held that the said activity of outward transportation of goods up to the buyers’ premises/dealers will fall within the definition of input service and that the credit is eligible.
Relying on the decision in Andhra Sugars Ltd, a bench of Ms. Sulekha Beevi C.S., Member (Judicial) and Shri Raju, Member (Technical) observed that “After appreciating the facts and evidences placed before us, we find that the decision of the Hon’ble Supreme Court is squarely applicable to the facts of this case. Moreover, the Hon’ble jurisdictional High Court in the case of M/s. Bata India Ltd. Vs. Commissioner of Customs & Central Excise, Chennai – III – 2019 (24) GSTL 326 (Mad.) had occasion to consider the very same issue as to whether credit is eligible on the outward transportation of goods upto the customer’s premises prior to the period 1.4.2008. The Hon’ble High Court applied the principle laid down in the case of M/s. Vasavadatta Cements Ltd.”
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