2011 (8) TMI 182 - AT - Service Tax

Cenvat credit - GTA service - Provisions of Rule 2(1)(d)(v) of Service Tax Rules, 1994 - The Revenue entertained a view that the GTA service, on which they have paid service tax as recipient, cannot be considered to be input service so as to avail cenvat credit of the same and utilise the same towards payment of duty - Hence, the Tribunal s decision in the case of CCE, Chandigarh vs. Nahar Industrial Enterprises Ltd. 2007 -TMI - 4330 - CESTAT NEW DELHI held in favour of the assessee - The Revenue s appeal is accordingly rejected.

Summary

Issues Involved:
Interpretation of Service Tax Rules regarding availing cenvat credit for GTA services.

Detailed Analysis:

1. Interpretation of Service Tax Rules:
The case involved a dispute regarding the availment of cenvat credit for GTA services by a company engaged in the manufacture of cotton yarn and man-made fabric. The Revenue contended that the GTA service, on which service tax was paid as a recipient, could not be considered an input service for availing cenvat credit. This disagreement led to proceedings being initiated against the company for the demand of service tax. The original adjudicating authority passed an order in this regard.

2. Decision of the Commissioner (Appeals):
The company appealed the original order, and the Commissioner (Appeals) ruled in favor of the assessee. The Commissioner relied on a previous decision of the Tribunal in the case of CCE, Chandigarh vs. Nahar Industrial Enterprises Ltd. The Revenue, dissatisfied with this decision, filed an appeal against the Commissioner's order before the Hon'ble Punjab & Haryana High Court, which was pending at the time.

3. High Court's Decision:
The Hon'ble Punjab & Haryana High Court's decision on the matter was crucial. The High Court, in its order dated 6.5.2010, upheld that the service tax paid from cenvat credit of GTA services received was lawful. It concurred with the Tribunal's view that the assessee was entitled to pay service tax from the cenvat credit available. Given this decision by the High Court, which approved the Tribunal's stance, the Appellate Tribunal found no reason to interfere with the Commissioner (Appeals) order. Consequently, the Revenue's appeal was rejected.

In conclusion, the judgment clarified the interpretation of Service Tax Rules regarding the availment of cenvat credit for GTA services, emphasizing the significance of legal precedents and higher court decisions in resolving disputes related to tax liabilities and input services.