2011 (1) TMI 196 - AT - Service Tax

Cenvat credit of service tax paid - respondents as deemed service provider paid service tax under TR-6 challan - no dispute about payment of service tax by the respondents and that as recipient they were entitled to the credit - no difficulty for the department in verifying the correctness of the credit taken as deemed service provider Decided in favor of assessee.

Summary

Issues:
- Availing cenvat credit based on TR-6 challans for service tax paid prior to 16.6.2005.

Analysis:
The appeal before the Appellate Tribunal CESTAT, New Delhi was filed by the department against the order of the Commissioner (Appeals) regarding the availing of cenvat credit of service tax paid during the period from April, 2005 to March, 2006 based on TR-6 challans. The Original authority had held that prior to 16.6.2005, TR-6 challans were not prescribed documents for taking cenvat credit. However, the Commissioner (Appeals) set aside this decision.

The department, represented by the Learned SDR, argued that the rule allowing TR-6 challan as a document for cenvat credit was amended only from 16.6.2005 and, therefore, the benefit of the amendment cannot be applied to the earlier period. On the other hand, the Learned Authorised Representative for the respondents contended that the respondents, being both deemed service provider and service recipient, had paid service tax under TR-6 challan, which made the credit taken permissible. The representative cited precedents like the case of Gaurav Krishna Ispat (I) Ltd. vs. CCE, Raipur and Hira Steels Ltd. Vs. CCE, Raipur to support this argument.

After considering the submissions and records, the Tribunal, represented by Mr. M.Veeraiyan, found that the respondents had indeed paid service tax under TR-6 challan as deemed service providers. The Tribunal noted that the person who paid the service tax and the one taking the cenvat credit were the same in this case. Therefore, there was no dispute about the payment of service tax by the respondents or their entitlement to the credit. The Tribunal emphasized that the department could easily verify the correctness of the credit taken since the payer and the credit claimant were identical.

In conclusion, the Tribunal rejected the department's appeal, stating that there was no merit in challenging the availing of cenvat credit based on TR-6 challans for the service tax paid before 16.6.2005.