Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  The GSTN has issued an Advisory dated 21.04.2026 about the introduction of an Offline Tool for the Invoice Management System (IMS)  *  CBIC extends due dates for filing of FORM GSTR 3B  for the month of April 2026 *  Interest cannot be imposed in adjudication order, if not demanded/quantified in show cause notice : Allahabad HC *  Wheelchairs with toileting facility eligible for exemption: CESTAT affirms customs duty exemption to importer *  Industries urge GST council to allow inverted duty refunds on input services *  Tamil Nadu GST dept introduced virtual hearing facility for GST appeals under under section 107 of the TNGST act: detailed guidelines  *  CIC urges authorities to implement GST evasion complaint tracking system *  Even if the assessee opts "NO" for personal hearing in form DRC-06 ,The mandatory requirement under section 75(4) to grant opportunity of hearing cannot be waived:Gujarat High Court  *  Glufosinate imports curbs imposed by govt *  Government extends Re-import period for exported cut & polished diamonds *  CIC flags lack of tracking system for tax evasion complaints,urges GST authorities to improve transparency *  No Custodial Interrogation needed in GST fraud case based on documentary evidence already in Department's Possession : Chattisgarh HC *  Orders under section cannot be sustained if passed without considering the taxpayer's objections and without granting a personal hearing:Gujarat High Court *  Mere cancellation of supplier's registration cannot,by itself,justify denial of ITC or cancellation of the recipient's registration:Bombay High Court *  High Court sets aside GST notice citing factual errors and natural justice violations *  Provisional Bank Attachment under Section. 110 of Customs Act Unsustainable Beyond Statutory period without Extension order: Bombay HC orders to defreeze accounts *  Post Clearance MRP Alteration by Distributor Does not attract Differential Customs Duty: CESTAT *  DGFT Expands scope of 'Screws' classification under RoDTEP Scheme  *  E-way bills surze to all time high of 140.6 million in March *  GST Exemption Allowed on Pure Labour Services for Standalone Houses: AAR  *  GST Payable Only on Margin in Second-Hand Car Sales, Subject to Strict Conditions and No ITC Claim: AAR *  DGFT rolls out procedure for allocation of calcined coke *  GST portal update : Pre-deposit amount now editable in Appeals *  J&K HC declared TMT scrap a 'Specified Good' eligibile for GST refunds under Support Scheme  *  Pigmy agents are employees of banks; no GST can be levied on commission  paid to them : Karnataka HC *  DGFT Revises HS Code Description for Screws Under RoDTEP *  GST Registration Cancellation Invalid Without Proper Service of Notice: Allahabad High Court. *  Bengaluru CGST | GST Backlog Appeals Deadline Fixed at June 30, 2026 *  No Time Bar on Refund of Service Tax for Services Not Rendered: CESTAT  Remands Indiabulls Case for Unjust Enrichment Check. *  Supreme Court Holds Renewable Energy Incentive Must Benefit Generators, Not Be Adjusted in Tariff
Subject News *   Delhi HC Quashes Order, Says Reminder Cannot Validate Improperly Served GST SCN *  KARNATAKA HIGH COURT REMANDS GST SHORTFALL MATTER DUE TO ABSENCE OF PERSONAL HEARING   *  CESTAT cancels confiscation and penalties on imported computer cabinet cases: Custom duty restricted to 111 surplus units *  Deposit of tax during search or investigation cannot be treated as 'Voluntary Payment' : Bombay High Court *  Section 76 of the CGST cannot be invoked where the tax has already been duly deposited, even if through another registration of the same entity: Madras High Court *  Sec 74 allows use of material regardless of source; illegality or flaws in section 67 search do not vitiate valid adjudication: HC *  Inter-State transfer of ITC on Amalgamation permissible as given under section 18(3) read with rule 41 of the CGST rules, 2017: Gujarat High Court *  HC: No GST on commisson paid to Pigmy Agents *  IGST refund denial on illegible bill of lading invalid absent chance to furnish docs; merit reconsideration in appeals directed: HC *  ITC is not admissible on GST paid on leasehold rights of land used fpr setting up an air seperation plant: AAAR,Tamil Nadu *  GST: No penalty under Section 74 after voluntary ITC reversal due to non-existent supplier : High Court *  TN AAAR denies GST ITC on Land Lease under Sec. 17(5)(d) for setting up plant and machinery *  GST proceedings quashed as notices sent to old address, despite updated address in registration *  Importer Can’t Be Penalised for Alleged IGCR Procedural Lapses Without Evidence of Departmental Error: CESTAT *  Structured Healthcare Training Not ‘Charitable Activity’, 18% GST Payable: AAR  *  CESTAT As The Appellate Authority For Central Sales Tax Disputes: A Paradigm Shift Under Finance Act, 2023 *   Rs. 25K Cost Imposed On SGST Joint Commissioner for Attaching Bank  Accounts Without Forming Mandatory “Opinion”: Bombay HC *   Ex-Parte GST Order Without Hearing Violates Natural Justice: Karnataka  High Court Quashes Adjudication and Bank Attachment.  *   Retrospective GST Cancellation Can’t Invalidate Genuine Transactions:  Jaipur Commissioner (Appeals) Quashes Rs. 95,670 ITC Demand. *   GST Pre-Deposit Non-Compliance: Allahabad High Court Allows Appeal  Subject to Rs. 30 Lakh Balance Deposit, Recognises Offline Filing. *  Documentary Nature of Evidence: Allahabad High Court Grants Bail in Rs. 32.66 Crore Fake ITC Fraud Case *  Supreme Court Flags Systemic Bias in Army’s Permanent Commission Process for Women Officers *  Re-Determination of Land Compensation Can Be Based on Appellate Court Awards, Clarifies Scope of S. 28-A: Supreme Court. *  Supreme Court Imposes Rs. 5 Lakh Costs On Rent Authority Officer For Acting Beyond Jurisdiction. *  DGGI Meerut | Court Denies Bail to Accused in Claiming Fake ITC And Export Refunds *  Denial of GST Rate Revision Benefit to Contractor Violates Article 14: Rajasthan HC *  GST Registration Cancellation for Non-Filing of Returns: Gauhati High Court Directs Restoration on Compliance. *   Supreme Court Quashes FEMA Adjudication Orders, Revives Proceedings at  Show Cause Stage. *   Higher Rank, Harsher Punishment Justified: Supreme Court Restores Dismissal  of Bank Manager in Misappropriation Case. *   Limitation for Export Refund to Be Counted from Foreign Exchange Realisation,  Not From Export Invoices Issuance: CESTAT  

Comments

Print   |    |  Comment

PJ/Case law/2014-15/2277

Whether credit of ST paid on GTA, insurance service could be used for payment of ST on output service of Authorised Service Station?

Case:-M/s TARAN ANGAD TRADERS (P) LTD Vs COMMISSIONER OF CENTRAL EXCISE, INDORE
 
Citation:-2014-TIOL-1537-CESTAT-DEL
  
Brief facts:-The appellant are an Authorised Service Station and also a dealer of M/s. Hero Honda Motors and accordingly, are also engaged in the business of purchase and sales of new motorcycles and part thereof besides, servicing of motorcycles by maintaining an Authorised Service Station from the same premises. The period of dispute in this case is from 1.10.2004 to 30.09.2005. The point of dispute is as to whether the cenvat credit of service tax paid on the GTA service, insurance service and telephone services availed could be used for payment of service tax on the output service of Authorised Service Station. The department being of the view that these input services mainly used for purchasing of the two wheelers and their storage and sale, the same cannot be treated as input services for servicing of the two wheelers and accordingly, the appellant would not be eligible for cenvat credit in respect of these services. On this basis, the jurisdictional Dy. Commissioner vide order-in-original dated 6.10.2006 confirmed cenvat credit demand of Rs.1,30,790/- along with interest and besides this, imposed penalty of Rs.2,000/- on them under Rule 15 of the Cenvat Credit Rules, 2004. On appeal being filed to the Commissioner
(Appeals), this order of the Dy. Commissioner was confirmed by the Commissioner (Appeals) vide order-in-appeal dated 10.09.2008. Against this order of the Commissioner (Appeals), this appeal has been filed.
 
Appellant’s contentions:-Shri P.K. Ram, Advocate, ld. Counsel for the appellant, pleaded that the issue involved in this case stands decided in favour of the appellant by the judgement of the Tribunal in the case of Badrika Motors (P) Ltd. Vs. CCE, Bhopal [2014-TIOL-24-CESTAT-DEL], wherein the Tribunal relying upon its earlier decision in the case of CCE, Tirupathi Vs.Shariff Motors [2009-TIOL-1571-CESTAT- BANG] and also the judgement in the case of Sri Venkanna Motors Pvt. Ltd. Vs. Asstt. Commissioner of Central Excise & Service Tax, Hyderabad 2009 (16) STR 34 (Tribunal- Bang.) has held that when M/s. Badrika Motors (P) Ltd., as an authorized service station, is also a dealer of two wheelers, they would be eligible for utilizing cenvat credit of service tax paid in respect of GTA service availed for transportation of the new Hero Honda Two Wheelers to their premises, for the payment of service tax on output services of the servicing of two wheelers provided by them in terms of their agreement with Hero Honda Motors, as in terms of the agreement, M/s. Badrika Motors (P) Ltd. was required not only to engage themselves in the sale of products and spares but also to service the two wheelers as well and it is axiomatic that no precise or mathematical correlation is required between the input and output services. He pleaded that in view of this judgement of the Tribunal, the impugned order is not sustainable.
 
 
Respondent’s contentions:-Shri Amresh Jain, ld. Departmental Representative defended the impugned order by reiterating the findings of the Commissioner (Appeals) and emphasized that services received by the appellant i.e GTA service, insurance service and telephone services have been received in connection with bringing new two wheelers, their storage and their sale and these services have no nexus with the output service of the appellant. He, therefore, pleaded that there is no infirmity in the impugned order.
 
 
Reasoning of judgment:-They have considered the submissions from both the sides.Issue involved in this case stands decided in favour of the Appellant by the Tribunal judgement in case of M/s. Badrika Motors (P) Ltd.The Tribunal relying upon earlier decision in the case of CCE, Tirupathi Vs. Shariff Motors - 2009-TIOL-1571 -CESTAT- BANG and also the judgement in the case of Sri Venkanna Motors Pvt. Ltd. Vs. Asstt. Commissioner of Central Excise & Service Tax, Hyderabad 2009 (16) STR 34 (Tribunal- Bang.)has held that when M/s. Badrika Motors (P) Ltd.,as an authorized service station, is also a dealer of two wheelers, would be eligible for utilizing cenvat credit of service tax paid in respect of GTA service availed for transportation of the new Hero Honda Two Wheelers to their premises, for the payment of service tax on output services of the servicing of two wheelers provided by them in terms of their agreement with Hero Honda Motors, as in terms of the agreement.
 
Decision:- Appeal allowed.
 
Comment:- The analogy of the case is that  the cenvat credit of ST paid on the GTA service, insurance service and telephone services availed could be used for payment of ST on the output service of Authorised Service Station. According to earlier decision of the tribunal in Badrika Motors, the cenvat credit on service tax paid on GTA availed can be used for payment of service tax on output service. Rule 2(l) of Cenvat Credit Rules, 2004 “Input service” includes any service used by a service provider for providing an output service, hence credit can be availed and utilised for discharging the output service liability of Authorised Service Station.
 
Prepared By:- Monika Tak

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com