Star Battery Ltd. Vs Commissioner of Central Tax (CESTAT Kolkata)
In this case, the appellant, a manufacturer of batteries, supplied its products to BSNL and availed Cenvat credit of Service Tax paid on outward freight charges. A Show Cause Notice dated 01.02.2010 was issued for the period from April 2005 to December 2009 on the ground that the appellant was not entitled to claim Cenvat credit on Service Tax paid for outward transportation. The appellant contended that it was eligible for such credit under Rule 2(l) of the Cenvat Credit Rules, 2004. It argued that prior to 01.04.2008, the rule permitted credit on services used for clearance of final products “from the place of removal.” For the period after 01.04.2008, it maintained that it continued to be eligible because it bore the freight and insurance costs and delivered the goods to customers, with ownership passing only at the buyer’s premises. The appellant also challenged the demand on the ground of limitation.
The lower authorities confirmed the demand, and the Commissioner (Appeals) dismissed the appeal as time-barred. However, the Tribunal noted that the appellant had approached the Kolkata High Court, which granted liberty to file an appeal before the Tribunal upon pre-deposit of 25% of the confirmed demand. Since the appellant complied with this condition, the Tribunal declined to reject the appeal on the ground of delay.
