2010 (10) TMI 356 - AT - Service Tax

Cenvat credit - GTA - it is the credit of service tax paid which is available to the assessee and not credit of service tax payable - the original adjudicating authority having held that there was no mala fide intention on the part of the assessee to evade duty - The demand having been raised after the normal period of limitation, is prima facie barred by limitation - Decided in the favour of the assessee

Summary

Issues:
1. Admissibility of service tax credit for services availed in December 2004.
2. Liability to pay service tax for services availed in December 2004.
3. Applicability of penalty and limitation period in the case.

Analysis:

Issue 1: Admissibility of service tax credit for services availed in December 2004
The appellant availed GTA services in December 2004 and paid service tax, which the Revenue later deemed as not taxable. The lower authorities denied the appellant the credit of service tax paid. However, the Tribunal acknowledged that the appellant, having paid the service tax, was entitled to the credit of the same. The Tribunal noted that the Revenue did not object at the time of payment, supporting the appellant's claim for credit.

Issue 2: Liability to pay service tax for services availed in December 2004
The appellant contended that since they paid the service tax for services availed in December 2004, they should be entitled to the credit. The Revenue argued that the services were not taxable, hence no liability existed. The original adjudicating authority confirmed the demand but refrained from imposing a penalty, citing the absence of mala fide intention to evade duty. The Commissioner (Appeals) upheld this decision, leading to the present appeal and stay petition.

Issue 3: Applicability of penalty and limitation period
The original adjudicating authority confirmed the demand using a longer period of limitation but did not impose a penalty due to the absence of mala fide intention. The Tribunal found merit in the appellant's argument on limitation, questioning the invocation of a longer period when no mala fide intention was established. The Tribunal deemed the demand as prima facie barred by limitation and allowed the stay application unconditionally, considering the appellant's case.

In conclusion, the Tribunal ruled in favor of the appellant, allowing the stay application and recognizing their entitlement to the credit of service tax paid for services availed in December 2004, despite the Revenue's contention on the tax liability. The decision highlighted the importance of considering the circumstances and intentions of the parties involved in tax disputes, especially regarding penalties and limitation periods.