Case Note & Summary
The Revenue (Commissioner of Central Excise, Customs, Belgaum) appealed against the Final Order No.20105/2014 dated 28.1.2014 passed by the CESTAT, Bangalore, which had set aside the demand for recovery of Cenvat Credit of Rs.22,31,610/- and service tax of Rs.15,36,051/- along with interest and penalty. The respondent, M/s. Godavari Sugar Mills Ltd., a sugar manufacturer, had availed Cenvat Credit on service tax paid on GTA (Goods Transport Agency) services for transportation of sugarcane from the farm to the factory gate. The Adjudicating Authority had confirmed the demand vide Order in Original No.11/2006 ADC dated 31.10.2006, but the CESTAT allowed the respondent's appeal. The Revenue challenged this before the High Court under Section 35G of the Central Excise Act, 1944. The High Court, at the admission stage, noted that the issue was covered by two judgments: Commissioner of Central Excise, Chandigarh vs. Nahar Industrial Enterprises Limited (STR-2012-25-129) of the Punjab and Haryana High Court and a Delhi High Court decision. Following these precedents, the High Court dismissed the Revenue's appeal, holding that transportation of sugarcane is an integral part of the manufacturing process and qualifies as input service under the Cenvat Credit Rules, 2004.
Headnote
A) Central Excise - Cenvat Credit - Input Service - GTA Service - Transportation of Sugarcane - The issue was whether service tax paid on GTA services for transportation of sugarcane from farm to factory gate is eligible as Cenvat Credit under Rule 2(l) of Cenvat Credit Rules, 2004 - The High Court held that the transportation of sugarcane is an essential part of the manufacturing process of sugar and thus qualifies as input service - The appeal was dismissed as the issue was covered by earlier decisions of the Punjab and Haryana High Court and Delhi High Court (Paras 2-3).
Issue of Consideration
Whether the respondent is entitled to Cenvat Credit of service tax paid on GTA services for transportation of sugarcane from the farm to the factory gate, as an input service used in or in relation to the manufacture of sugar.
Final Decision
The High Court dismissed the appeal, holding that the issue is covered by earlier judgments of the Punjab and Haryana High Court and Delhi High Court, and thus no substantial question of law arises.
Law Points
- Cenvat Credit
- Input Service
- GTA Service
- Transportation of Sugarcane
- Manufacturing Process
- Central Excise Act
- 1944
- Finance Act
- 1994
- Cenvat Credit Rules
- 2004
