2007 (7) TMI 32 - AT - Service Tax

Payment of Service tax - Revenue contended that respondent is liable to pay service tax in cash under TR-6 challan of freight on road transport service - Held that revenue contention was not correct on the ground that respondent made payment also through cenvat credit

Summary

Issues: Whether the respondent is liable to pay Service tax in cash under TR-6 challan of freight on road transport service rendered by Goods Transport Agencies in respect of inputs raw material received in their factory during a specific period.

Analysis:
The Appellate Tribunal, Mumbai, heard both sides regarding the appeal by the revenue against the orders passed by the Commissioner (Appeals) concerning the liability of the respondent to pay Service tax. The impugned order set aside the demand confirmed by the original adjudicating authority. The Commissioner (Appeals) referred to relevant provisions such as Notification 32/2004(ST), Cenvat Credit Rules, 2004, and Sec. 68(2) of Finance Act, 1994. It was noted that the respondents were already paying Service tax on goods transport services, making the services in question "output service." The Tribunal decisions in similar cases were cited in favor of the assessee. The assessee, engaged in manufacturing, availed Cenvat credit and was registered under Service tax Rules, 1994 for taxable services by Goods Transport Agency.

The ld. JDR contended that the scope and object of the explanation under the definition of "output service" had not been adequately considered by the decisions relied upon by the respondents. He argued that the matter should be referred to a Division Bench for correct interpretation. However, the Tribunal disagreed with this contention, stating that the respondents fell within the definition of "provider of taxable service" under Rule 2(r), thus attracting the definition of "output service." The impugned order was deemed not erroneous, and the contentions put forth by the ld. JDR were found to lack merit. Consequently, the Tribunal dismissed the appeal filed by the revenue, concluding that no modification or reference to a higher bench was necessary.

In summary, the Tribunal upheld the impugned order passed by the Commissioner (Appeals), ruling in favor of the assessee and dismissing the revenue's appeal. The decision was based on the interpretation of relevant legal provisions and previous Tribunal decisions, establishing the liability of the respondent to pay Service tax on the services provided.