CCE Vs. MODERN LAMINATORS LTD

JUDGEMENT

(1.) THIS is an appeal by the Revenue against order -in -appeal No. 65/CE/ALLD/2007 dated 28/3/07 passed by CCE (Appeals), Allahabad. The respondents are engaged in the manufacture of HDPE, PP Bags, PVC Pipes classifiable under Chapter sub -heading No. 3923.90 and 3917.00 of the First Schedule to the Central Excise Tariff Act, 1985. They are also registered under Section 69 of Finance Act, 1994, as a notified person liable for paying Service Tax in relation to transport of goods by road in a goods carriage in term of dated 31/12/2004 issued under Section 68(2) of Finance Act, 1994. The Respondents have sales at the factory gate on FOR basis and since in respect of these sales the transportation of the goods is arranged by them, the service tax is paid by them and its Cenvat credit is taken by them by treating the outward transportation of the finished goods as 'input service.' The respondent took the Cenvat credit amounting to Rs. 2,21,390/ - in respect of outward transportation of finished goods from the factory gate to the customer's premises. The Assistant Commissioner vide order -in -original dated 16/11/06 disallowed this credit and confirmed the demand alongwith interest and beside this, imposed penalty of Rs. 3,000/ - under Rule 15 of the Cenvat Credit Rules. The Commissioner (Appeals), however, vide the impugned order -in -appeal dated 28/3/07 set aside the Assistant Commissioner's orders holding that the outward transportation of finished goods from the factory gate to the customer's premises is covered by the definition of input service. The Revenue has come up in appeal against this order of CCE (Appeals).

(2.) HEARD both the sides.