Order Date – 19 July 2022

Facts – 

• The Appellant, M/s Gillanders Arbuthnot & Company Limited, is a manufacturer of chemicals and had availed the services of Goods Transport Agency (GTA) during the month of June 2007 for clearance of the said finished goods from its factory premises at West Bengal to the depots and/or directly to its customers.
• Show Cause Notice dated 26 June 2008 was issued alleging irregular availment of Cenvat Credit of Service tax amounting to Rs.5,34,503/- along with interest and penalty in respect of the GTA services on the purported ground of having been used beyond the place of removal i.e. factory, and consequently not qualifying as an input service under Rule 2(l) of the Cenvat Credit Rules.
• Aggrieved the Appellant filed an appeal.

Issue – 

• Whether the Cenvat Credit availed by the appellant is irregular and whether they are liable to pay service tax, interest and penalty?

Order – 

• The Tribunal observed that the present case pertains to the period prior to the amendment introduced vide Notification No. 10/2008-CE (N.T.) dated 1 March 2008 effective 1 April 2008 whereby the expression “from the place of removal” was substituted by the expression “upto the place of removal”.
• Therefore, by relying on SC judgment in CCE v. Vasavadatta Cements case in which it was held that the expression “from the place of removal” has to be from the place of removal upto a certain point. Therefore, tax paid on the transportation of the final product from the place of removal upto the first point, whether it is depot or the customer, has to be allowed”.
• Therefore, by respectfully following the Order of the Hon’ble Supreme Court the impugned Order is set aside, and the appeal is allowed.