2013 (6) TMI 26 - AT - Service Tax

Non compliance of or pre-deposit ordered by commissioner (appeals) - utilization of the cenvat credit for the discharge of service tax liability on the GTA services. - held that - since the first appellate authority has not decided the order on merits, we are precluded from considering the merits and disposing the appeal. - matter remanded back to the first appellate authority to reconsider the issue afresh and pass an order on merits without insisting any amounts as pre-deposit.

Summary

Issues involved:
1. Non-compliance of pre-deposit for appeal rejection
2. Utilization of cenvat credit for service tax on GTA services

Analysis:

1. The first issue revolves around the rejection of the appeal due to non-compliance with the pre-deposit order by the first appellate authority. The Tribunal noted that the appeal was dismissed solely for this reason. After considering arguments from both sides, the Tribunal found that the appeal could be disposed of at that moment. Consequently, the Tribunal allowed the application for the waiver of the pre-deposit amounts and proceeded to take up the appeal for disposal.

2. The second issue pertains to the utilization of cenvat credit for the discharge of service tax on GTA services received by the appellant. The Tribunal observed that the first appellate authority had directed the appellant to deposit the entire service tax liability, along with interest and penalty, for the appeal to be heard and decided. The issue in question dates back to a period prior to March 1, 2008 (from April 2006 to October 2006). Before the issuance of a specific notification, various decisions had established that the assessee could use cenvat credit for paying service tax on GTA services. The Tribunal held that these decisions' principles should apply in this case. However, since the first appellate authority had not adjudicated on the merits of the case, the Tribunal set aside the order and remanded the matter back to the first appellate authority. The Tribunal instructed the authority to reconsider the issue afresh, decide on the merits without requiring any pre-deposits, and ensure adherence to the principles of natural justice in reaching a conclusion.

In conclusion, the appeal was allowed by way of remand, highlighting the importance of considering cenvat credit utilization for service tax liabilities and ensuring procedural fairness in the appellate process.