Balmer Lawrie and Co. Ltd Vs Commissioner of CGST & Central Excise (CESTAT Kolkata)
Summary: The appellant had availed CENVAT Credit of service tax paid on outward freight charges during the period 2005-06 to 2007-08. A Show Cause Notice was issued on 19th March 2010 proposing denial of the credit. The lower authorities confirmed the demand, leading the appellant to approach the Tribunal.
The appellant submitted that outward transportation was an input service under Rule 2(l) of the CENVAT Credit Rules, 2004, as applicable during the relevant period. Until 31.03.2008, the definition covered services used by a manufacturer in relation to manufacture and clearance of final products from the place of removal. The appellant contended that the goods had been dispatched from its factory, which was the place of removal, and therefore the outward freight qualified for credit. The appellant also argued that the demand was time-barred because the CENVAT credit details had been disclosed in the ER-1 returns and there was no suppression.
The Tribunal considered the definition of input service under Rule 2(l) as it stood up to 31.03.2008. The provision covered services used by a manufacturer directly or indirectly in relation to manufacture and clearance of final products from the place of removal and included outward transportation.
