SERVICE TAX ON TRANSPORTATION CHARGES BEYOND THE POINT OF REMOVAL – NOT AN INPUT SERVICE

The Delhi Bench of CESTAT in the case of Gujarat Ambuja Cements Ltd. V. Commissioner of Central Excise has held that service tax paid on transportation of goods beyond the place of removal is not an input service. In the present case, the appellant company was in the business of manufacture of cement. It claimed cenvat credit of service tax paid on the transportation charges from the place of removal till the place of customer, which did not find favour with the Tribunal. CESTAT held that the post sale transport of manufactured goods is not an input for the manufacturer/consignor. Service used in relation to the clearance from the place of removal and service used for outward transportation are to be treated as input service.