- (1.) The appeal is directed against a judgment and order dated 1st August, 2012 passed by the Customs, Excise and Service Tax, Appellate Tribunal reversing the order of the Commissioner by which the demand of service tax credit including education cess aggregating to a sum of Rs. 10,39,061 for the period during January, 2005 to December, 2007 was confirmed and a penalty of Rs. 10,000 was imposed. The learned Tribunal set aside the order following the decision in the case of CCE & ST v. ABB Ltd,2011 12 Taxman 57. Aggrieved by the order of the Tribunal, the Revenue has come up in appeal.
(2.) Mr. Roy Chowdhury, learned Senior Advocate, appearing in support of the appeal, submitted that the judgment of the Karnataka High Court did not decide the issue correctly, and therefore, the learned Tribunal should not have followed the same. He drew our attention to the definition of 'input service' prior to its amendment in the year 2008. He submitted that the services taken into consideration in the aforesaid definition are all directed towards manufacture of the goods. They do not contemplate any service with respect to delivery of the finished products at the doorstep of the buyer. He contended that the expenditure incurred by the assessee for the transportation of the finished goods for delivery at the destination and the consequent service tax paid cannot logically be construed to be a service in the manufacture of the goods. He added that the circular issued by the Board has, in fact, made some concession only in the cases where the manufacturer/consignor may claim that the sale has taken place at the destination point because in terms of the sale contract/agreement (i) the ownership of goods and the property in the goods remained with the seller of the goods till the delivery of the goods in acceptable condition to the purchaser at his door step; (ii) the seller bore the risk of loss of or damage to the goods during transit to the destination; and (iii) the freight charges were an integral part of the price of goods. In such cases, the credit of the service tax paid on the transportation up to such place of sale would be admissible if it can be established by the claimant of such credit that the sale and the transfer of property in goods (in terms of the definition as under section 2 of the Central Excise Act, 1944 as also in terms of the provisions under the Sale of Goods Act, 1930) occurred at the said place.
(3.) He drew our attention to the reply to the show cause given by the respondent-assessee. Nowhere did the assessee in its reply disclose the facts and circumstances to bring its case within the four corners of the relaxation made by the circular. He, therefore, contended that the judgment under challenge cannot be supported and should, therefore, be set aside.;