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2011 (6) TMI 351 - AT - Service TaxUtilized cenvat credit for payment of service tax on GTA services - extended period invoked - Held that - Assessee has a very strong case on limitation and all the decisions rendered by the Tribunal were in favour of the assessee and therefore suppression of facts or mis-declaration could not have been invoked and in this case show-cause notice was issued in December 2007 where the period for which the demand has been made is from January 2005 to March 2006. However the fact remains that till the decision in the case of ITC Ltd.Vs. CCE Guntur 2011 (3) TMI 186 - CESTAT BANGALORE all the decisions were in favour of assessee therefore invoking suppression or misdeclaration etc. for confirmation of demand is not in order - Further submission made by assessee that even the original adjudicating authority has taken a view that the failure on the part of the assessee is acceptable as bonafide error and cannot be attributed to be willful intention to evade tax - appeal falls on the ground of limitation alone and since appeal can be rejected only on this ground - Appeal filed by the Revenue as well as the Cross-objection filed by the respondent get disposed of.
Issues:
1. Utilization of cenvat credit for payment of service tax on GTA services. 2. Interpretation of previous decisions by the Tribunal. 3. Application of limitation in the case. 4. Consideration of suppression of facts or mis-declaration. Analysis: Issue 1: Utilization of cenvat credit for payment of service tax on GTA services The case involved the respondents utilizing cenvat credit for paying service tax on GTA services received by them from January 2005 to March 2006. The Revenue contended that this practice was incorrect, leading to proceedings initiated against the respondents. The ld. Commissioner ruled in favor of the respondents based on previous Tribunal decisions. The Revenue appealed this decision. Issue 2: Interpretation of previous decisions by the Tribunal The ld. DR for the Revenue cited the case of ITC Ltd. Vs. CCE, Guntur, where the Tribunal held that assesses engaged in providing taxable services or manufacturing dutiable products cannot use cenvat credit to pay service tax on GTA services. The ld. Counsel for the respondents referenced decisions favoring their stance, including the case of CCE, Belgaum Vs. Shri Tubes & Steels Pvt. Ltd. The Tribunal had considered multiple decisions in this matter, unlike the ITC Ltd. case. The discrepancy in Tribunal decisions led to a discussion on the differentiation of provisions of Rule 2(r) and Rule 2(q) of Cenvat Credit Rules. Issue 3: Application of limitation The judge decided that the appeal could be allowed based on the limitation issue alone, without delving into the merits due to conflicting views by different Benches on the subject. The judge noted that until the ITC Ltd. case, decisions had favored the respondents, making the invocation of suppression or misdeclaration for confirming the demand inappropriate. The judge also considered the original adjudicating authority's view that the assessee's failure was a bonafide error and not willful tax evasion. Issue 4: Consideration of suppression of facts or mis-declaration In conclusion, the judge rejected the appeal and cross-objection based on the limitation ground alone. The decision highlighted the importance of the limitation aspect in this case, emphasizing that the appeal could be dismissed solely on this basis, without delving into the merits due to the conflicting Tribunal decisions and the history of decisions favoring the respondents.
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