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Issues involved:
The judgment involves the issue of the utilization of service tax input credit for payment of service tax liability on goods transport service by a manufacturer registered under service tax. The main contention is whether the manufacturer can treat goods transport service as an output service for utilizing accumulated service tax credit. Details of the judgment: Issue 1: Utilization of service tax credit for goods transport service: The dispute in the case revolves around the use of service tax input credit accumulated by the appellant manufacturer for discharging service tax liability on goods transport service received. The Commissioner (Appeals) found that the appellants, being both a service tax assessee and a manufacturer of excisable goods, are eligible to use accumulated input credits for making payment of goods transport service. This eligibility is based on Circular F. No. 345/4/05 TRU dated October 3, 2005, which allows the use of service tax credit if the entity is a manufacturer or a provider of any other output service. The Commissioner disagreed with the adjudicating authority's denial of credit utilization, stating that the appellants can treat goods transport service as an output service for utilizing the accumulated credit. Issue 2: Interpretation of Cenvat Credit Rules: The Revenue challenged the orders, arguing that the assessees are not providing any output services except receiving input services from a goods transport agency. The Revenue contended that utilizing Cenvat credit for payment of service tax on input service instead of output service is not in accordance with the provisions of the Cenvat Credit Rules, 2004. The Revenue also highlighted that the assessees did not obtain service tax registration for discharging tax liability on input services under section 68(1) of the Finance Act, 1994. Judicial findings and conclusion: The Commissioner (Appeals) and the Tribunal relied on various judgments, including the case of Andhra Pradesh Paper Mills Ltd., to support the findings that the appellants can utilize Cenvat credit for payment of service tax on goods transport service. The Tribunal noted that the issue was settled in favor of the assessee by previous judgments, and therefore, rejected the Revenue's appeals. The judgments cited by the counsel and the findings of the Commissioner (Appeals) were considered conclusive in determining that the appellants were entitled to use the accumulated credit for discharging duty liability on any dutiable goods or taxable services. In conclusion, the Tribunal upheld the Commissioner (Appeals) findings, stating that the appellants were within their rights to use the accumulated service tax credit for paying service tax on goods transport service, treating it as an output service. The judgments cited in support of the appellants' position were deemed conclusive, leading to the rejection of the Revenue's appeals.
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