Relief to Ramco Cement: No Denial of CENVAT credits of Service Tax paid on Outward Transportation of Finished Products from factory to dealers and buyers, rules CESTAT [Read Order]
Chennai CESTAT ruled that service tax credits from CENVAT for finished goods transported outside of the factory to dealers' and buyers' locations may not be refused
![Relief to Ramco Cement: No Denial of CENVAT credits of Service Tax paid on Outward Transportation of Finished Products from factory to dealers and buyers, rules CESTAT [Read Order]](https://www.taxscan.in/wp-content/uploads/2023/12/Ramco-Cement-Relief-to-Ramco-Cement-Denial-of-CENVAT-credits-CENVAT-credits-Service-Tax-paid-on-Outward-Transportation-Outward-Transportation-of-Finished-Products-CESTAT-Rules-TAXSCAN.jpg "Relief to Ramco Cement: No Denial of CENVAT credits of Service Tax paid on Outward Transportation of Finished Products from factory to dealers and buyers, rules CESTAT [Read Order]")
The Chennai Bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT), while granting relief to Ramco Cement, held that CENVAT credits of service tax paid on outward transportation of finished products from the factory to the place of dealers and buyers should not be denied. The appellant, Ramco Cements Ltd, is engaged in manufacturing cement and is registered with the...
The Chennai Bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT), while granting relief to Ramco Cement, held that CENVAT credits of service tax paid on outward transportation of finished products from the factory to the place of dealers and buyers should not be denied.
The appellant, Ramco Cements Ltd, is engaged in manufacturing cement and is registered with the Service Tax Commissionerate under Goods Transport Agency Services. The appellant availed CENVAT credit of Service Tax paid on freight charges incurred for outward transportation of their finished products.
According to the department, the said credit is not eligible as the activity of outward transportation from the place of removal is not covered under the definition of input service as per Rule 2(l) of CENVAT Credit Rules 2004.
Subsequently, the department issued a show-cause notice for the period January 2007 to February 2008, proposing to disallow the credit and to recover the same along with interest, and imposing a penalty under Rule 15(3) of CENVAT Credit Rules 2004.
Aggrieved by the order of the department, the appellant filed an appeal before the Commissioner (Appeals), who upheld the order of the department.
R. Parthasarathy, Counsel for the appellant, argued that with effect from 1/4/2008, there was a change in the definition of 'input services,' and the words "from the place of removal" were amended to "up to the place of removal." Further, the issue stands covered by the decision in the appellant’s own case. Satyanarayanan appeared for the department and supported findings in the lower authorities' order.
After analyzing the arguments and submissions of both parties, the two-member bench of Sulekha Beevi C.S, Member (Judicial), and Vasa Seshagiri Rao, Member (Technical), observed that the issues stand covered in the appellant’s own case.
Therefore, it was held that the CENVAT credits of service tax paid on outward transportation of finished products from the factory to the place of dealers and buyers should not be denied.
To Read the full text of the Order CLICK HERE
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