ITC LTD Vs. COMMISSIONER OF CENTRAL EXCISE, BANGALORE

JUDGEMENT

(1.) HEARD both sides on the stay petition. The applicant is a manufacturer of Cigarettes which is subject to specific rate of duty. The applicant has availed CENVAT credit on Service Tax paid on GTA service utilized for transport of the cigarettes from the factory gate to the "warehouses". The removal of the cigarettes is on payment of duty at the time of removal from the factory. The Original authority has denied the credit on the ground that the goods have been removed from "place of removal" namely, the factory gate, and on payment of duty at the time of removal and the GTA service utilized cannot be treated as 'input service'.

(2.) THE learned Advocate relying on the Board's Circular F. No. 137/3/2006 -CX.4, dated 2 -2 -2006, submits that the credit of Service Tax paid on the transportation of the goods up to depot will be eligible, irrespective of the fact whether the goods are chargeable to excise duty at specific rates or ad valorem rates on the basis of valuation under Section 4 or 4A of the Central Excise Act. He also submits that the decision of the Hon'ble High Court of Karnataka in the case of ABB Limited ( : 2011 (23) S.T.R. 97 (Kar.)) relates to the period prior to 1 -4 -2008, The Commissioner (Appeals), in their own case, relating to subsequent period, vide Order -in -Appeal No. 230/2011 -C.E., dated 5 -8 -2011, allowed the credit relying on the above Circular of the Board.

(3.) WE have carefully considered the submissions from both sides and perused the records. Neither the decision of the Hon'ble High Court in the case of ABB Limited (supra) nor the Board's Circular dated 2 -2 -2006 may be of any help in the present case as both related to the period prior to 1 -4 -2008 i.e. before the amendment introduced to Rule 2(1) of the CENVAT Credit Rules, 2004. However, we find that the Commissioner (Appeals), for the subsequent period, has allowed the credit in identical circumstances. In view of the above, we waive the pre -deposit of the dues as per the impugned order and stay recovery thereof till the disposal of the appeal.