2010 (8) TMI 188 - AT - Service Tax

CENVAT credit utilized for payment of Service Tax on GTA - during the period October 2006 to September 2007 - SCN issued demand was confirmed along with interest and penalties - Held that - Notification No. 10/2008-C.E. (N.T.), dated 1-3-2008, prior to that the respondents were entitled to utilize their CENVAT credit account for payment of service tax on GTA service - reliance of the Commissioner (Appeals) is absolutely correct and there is no ambiguity in the impugned order - appeal is rejected

Summary

Issues:
Appeal against dropping demand on CENVAT credit utilization for Service Tax on GTA for a specific period.

Analysis:
The appeal was filed by the Revenue against the dropping of demand by the Commissioner (Appeals) regarding the utilization of CENVAT credit for payment of Service Tax on GTA by the respondent for the period October 2006 to September 2007. The key contention was whether the respondent was entitled to use CENVAT credit for this purpose, considering the relevant notifications and precedents cited in the case.

The Revenue argued that the decisions cited in favor of the respondent were from a period prior to April 2006, and after 19-4-2006, the respondent was not allowed to use CENVAT credit for paying service tax on GTA. However, the respondent's advocate contended that the facility was withdrawn only by Notification No. 10/2008-C.E. (N.T.), dated 1-3-2008. Therefore, the decisions relied upon by the respondent were applicable to their case as they were made before the withdrawal of the facility.

Upon examining the relevant Notification No. 10/2008-C.E. (N.T.), it was established that prior to its issuance, the respondents were indeed permitted to utilize their CENVAT credit for paying service tax on GTA, as supported by the cited decisions. The Member (J) agreed with the submissions made by the respondent's advocate, upholding the Commissioner (Appeals) decision as correct and without ambiguity. Consequently, the appeal was dismissed, and the cross-objection was disposed of accordingly.

In conclusion, the judgment clarified that the respondent was within their rights to use CENVAT credit for paying service tax on GTA for the period in question, based on the applicable notifications and precedents. The decision highlighted the importance of considering the specific timelines and regulations governing such credit utilization in tax matters.