CENVAT Credit on Service Tax on outward transport – Larger Bench decision in ABB Ltd stayed by Karnataka HC
THE Karnataka High Court has stayed the ABB decision in CEA 121/2009. The matter is to be finally heard on 29.12. 2009. There was visible jubilation among Service Tax officers in Bangalore, who are closely monitoring the case.
The CESTAT larger Bench in ABB had held, “we answer the reference by holding that the services availed by a manufacturer for outward transportation of final products from the place of removal should be treated as an input service in terms of Rule 2(1)(ii) of the CENVAT Credit Rules, 2004 and thereby enabling the manufacturer to take credit of the service tax paid on the value of such services.”
Netizens may recall that recently the Chennai Bench of the Tribunal almost disagreed with the Larger Bench decision while dealing with a batch matter of 44 appellants adjourned the case awaiting the decision of the Karnataka High Court in the Department's Stay Petition. []