- Bookmark
- Share
- CaseIQ
Cce, Jaipur-Ii v. M/S J.K Cement Works .
Factual and Procedural Background
The Revenue appealed an order concerning whether the respondents could avail CENVAT/credit for service tax paid on goods transport agency (GTA) services used for outward transportation of goods cleared from the respondents' factory and supplied to customers. The Commissioner had held that cheques given by customers were to be encashed only after delivery, and therefore the place of removal should be treated as the buyers' premises. The Tribunal did not decide that factual issue but disposed of the appeal by following earlier decisions of a Larger Bench of the Tribunal and the Hon'ble High Court of Karnataka.
Legal Issues Presented
- Whether the respondents are entitled to avail the credit of service tax paid on GTA services in respect of goods cleared from their factory and supplied to their customers.
Arguments of the Parties
Commissioner/Revenue's Position
- The Commissioner treated the place of removal as the buyers' premises because the cheques given by the customers were to be encashed only after delivery (implying a specific factual/legal consequence on classification of removal).
Respondents' Position
- The respondents asserted entitlement to avail credit of service tax paid on GTA services for outward transportation of the final product.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| ABB Ltd. reported in (Tri.-LB) | An assessee is entitled to avail the credit of service tax paid on the GTA services availed by him for outward transportation of the final product. | Followed by the Tribunal to dispose of the appeal in favour of the respondents; contributed to rejection of the Revenue's appeal. |
| Hon’ble High Court of Karnataka’s decision reported in (Kar.) | An assessee is entitled to avail the credit of service tax paid on the GTA services availed by him for outward transportation of the final product. | Followed by the Tribunal; the High Court had rejected the Revenue's appeal, supporting the respondents' entitlement. |
Court's Reasoning and Analysis
The Tribunal noted the Commissioner's factual finding regarding cheque encashment and place of removal but chose not to decide the matter on that basis. Instead, the Tribunal disposed of the appeal by applying the authority of a Larger Bench decision in ABB Ltd. and a Karnataka High Court decision, both holding that an assessee may avail credit of service tax paid on GTA services for outward transportation of the final product. Relying on those precedents, the Tribunal concluded that the issue was settled and that the Revenue's appeal lacked merit.
Holding and Implications
DISMISSED — The appeal filed by the Revenue is rejected.
Implications: The direct effect is that the respondents are entitled to avail the credit of service tax paid on GTA services for outward transportation of their final product, and the Revenue's challenge to that entitlement is overruled. The opinion treats the matter as settled by earlier authorities and does not purport to establish a new precedent beyond applying those decisions.
[Order per : Archana Wadhwa, Member (J)]. - The prime issue involved in the appeal of the Revenue is as to the whether the respondents are entitled to avail the credit of service tax paid on the GTA services in respect of the goods cleared from their factory and supplied to their customers.
2. The Commissioner in his impugned order has held that the cheques given by the customers were to be encashed only after the delivery of the goods and as such the place of removal is required to be considered as buyers’ premises.
3. We find that without going into the above aspect, the appeal can be disposed of by following the Larger Bench of the Tribunal in the case of ABB Ltd. reported in (Tri.-LB) and the Hon’ble High Court of Karnataka’s decision reported in (Kar.) vide which the appeal filed by the Revenue was rejected. It stands held by the above judgment that an assessee is entitled to avail the credit of service tax paid on the GTA services availed by him for outward transportation of the final product.
4. Inasmuch as the issue stands settled by the above referred decision of the Tribunal, we find no merit in the appeal of Revenue, the same is accordingly rejected.
(Pronounced in the open Court)
Alert