2011 (6) TMI 416 - AT - Service Tax

Cenvat credit used for paying service tax on GTA services - Held that - Recipient of GTA services can utilize cenvat credit account for paying service tax as decided in NCCE Chandigarh vs. Nahar Industrial Enterprises Ltd. (2010 (5) TMI 608 - PUNJAB AND HARYANA HIGH COURT)- in favour of assessee.

Summary

Issues:
Appeal by department against Commissioner (Appeals) order regarding utilization of cenvat credit account for paying service tax on GTA services by manufacturers of paper and paper products.

Analysis:
The Appellate Tribunal CESTAT, DELHI heard an appeal by the department against the Commissioner (Appeals) order regarding the utilization of cenvat credit account for paying service tax on GTA services by manufacturers of paper and paper products. The dispute revolved around whether the recipients of GTA services could use cenvat credit account for paying service tax. The department argued that the issue was pending before a Larger Bench of the Tribunal, citing a specific case. However, they acknowledged that the facts of the present case were similar to another case. On the other hand, the appellants' advocate referred to a judgment by the Hon'ble High Court of Punjab & Haryana in a different case, which held that recipients of GTA services could indeed utilize cenvat credit account for paying service tax.

The Tribunal noted that the issue had been conclusively decided in favor of the assessee by the Hon'ble High Court of Punjab & Haryana in a specific case, establishing that recipients of GTA services could use cenvat credit account for paying service tax. Given this legal precedent, the Tribunal found no valid grounds to interfere with the Commissioner (Appeals) order and consequently rejected the appeal. The judgment was pronounced in open court, bringing the matter to a close.