Whether credit availed on transporter’s invoice deniable on the ground that service tax was payable by recipient ?

PJ/CASE LAW/2015-16/2876

Case:-RUCHA ENGINEERS P. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, AURANGABAD

Citation:- 2015 (39) S.T.R. 518 (Tri. - Mumbai)

Brief Facts:-The Appellant is in appeal against the impugned order in second round of litigation. The brief facts of the case are that appellant are manufacturers of excisable goods and procured inputs. On these inputs, the transporter has paid service tax and on the basis of invoice issued by the transporter, the appellant availed input service credit of Goods Transport Agency Service. Revenue is of the view that as in the case of Goods Transport Agency Service, the appellant are required to pay service tax and they have not paid the service tax, therefore, they are not entitled for input service credit on Goods Transport Agency Service. Accordingly, show-cause notice was issued and adjudication took place confirming the demand, interest and penalty as proposed in the show-cause notice. On appeal before the Commissioner (Appeals), the appellant were directed to make pre-deposit which appellant failed to do so. Accordingly, appeal was dismissed for non-compliance. The appellant preferred an appeal before the Tribunal. The matter was remanded to the Commissioner (Appeals) to decide the issue on merits without insisting on pre-deposit. In remand proceedings, the impugned order was passed confirming the Adjudication order. Aggrieved by the same, appellant is before the tribunal.

Appelants Contention-The appellant filed a request to decide the appeal on merits, in the light of the decision ofDhampur Sugar Mills Ltd. v. CCE - 2011 (22) S.T.R. 598 = 2010 (260) E.L.T. 106 (T). Therefore, matter is taken up for disposal.

Respondents Contention:-The ld. AR reiterated the finding of the impugned order.

Reasoning Of Judgement:-Considered the submission made by both sides and perused the records. On perusal of the records, tribunal find that it is not disputed that on Goods Transport Agency Service which was availed by the appellant, service tax has been paid, and appellant has taken the credit of the service tax paid. It is immaterial who has paid the service tax. Ld. Commissioner (Appeals) has failed to appreciate the fact that the service has suffered service tax and any payment towards duty or service is entitled for input service credit/input credit. Therefore, the finding of the lower authorities that in the case of Goods Transport Agency Service, service tax is required to be paid by the service recipient is not tenable. Accordingly, impugned order deserves no merit, hence set aside. Appeal is allowed.

Decision:- Appeal allowed.

Comment:- The gist of the case is that for availing the Cenvat credit of service tax paid on GTA services it is immaterial that who has paid the service tax i.e. any payment made towards duty or service Tax would be entitled for input service credit. Therefore, even if the service tax is paid by the transporter the credit can be taken by the assessee and hence the finding of the lower authorities that in the case of GTA Service, service tax is required to be paid by the service recipient is not justifiable.

Prepared By:- Neelam Jain

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PJ/CASE LAW/2015-16/2876

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