A two member bench of CESTAT Ahmedabad ( Customs Excise & Service Tax Appellate Tribunal ) has held that non-inclusion of costs of transportation in assessable value is no ground to deny CENVAT credit
The Assessee, APAR Industries Ltd is manufacturer of transformer oil, aluminium conductor falling under chapter heading 27 and 76 of the First Schedule to the Central Excise Tariff Act, 1985. The assessee availed outward transportation service from Goods Transport Agency ( GTA ) to transport the goods from the factory to customer’s premises and discharged service tax under Reverse Charge Mechanism ( RCM ) on GTA services. The Appellant availed the credit of the said service tax paid under RCM. However, due to prevailing ambiguity regarding the admissibility of the credit the Appellant reversed the said credit under protest.
Assessee contended that the Assesssee availed the GTA services for outward transportation of the final products on which the service tax is paid under RCM by the Assessee and since the said services are availed for transporting goods from the factory to the customer’s premise, the said service qualify as ‘input service’ and CENVAT credit of same is admissible to the Assessee.
Revenue contended CENVAT was wrongly availed on credit of service tax paid on GTA services under RCM for the period January 2005 to June 2007.
The bench comprising Ramesh Nair ( Member, Judicial ) and Raju ( Member, Technical ) held that it cannot be said that the assessee had a mala fide intention to evade the excise duty by taking the wrong credit. The bench observed that there was no suppression of fact or misstatement on the part of the assessee and further held that non-inclusion of costs of transportation in assessable value is no ground to deny CENVAT credit.
Assessee was represented by Prakash Shah and Mohit Raval. Revenue was represented by Rajesh Nathan.
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