2014 (1) TMI 1566 - AT - Central Excise

Goods Transport Agency Service - Availment of CENVAT Credit - Held that - On Goods Transport Agency Service which was availed by the appellant, service tax has been paid, and appellant has taken the credit of the service tax paid. It is immaterial who has paid the service tax. Ld. Commissioner (Appeals) has failed to appreciate the fact that the service has suffered service tax and any payment towards duty or service is entitled for input service credit/input credit. Therefore, the finding of the lower authorities that in the case of Goods Transport Agency Service, service tax is required to be paid by the service recipient is not tenable - Decided in favour of assessee.

Summary

Issues:
1. Entitlement to input service credit on Goods Transport Agency Service.
2. Requirement of payment of service tax on Goods Transport Agency Service.
3. Failure to comply with pre-deposit directive.
4. Adjudication order confirmation by the Commissioner (Appeals).
5. Applicability of Dhampur Sugar Mills Ltd. case decision.

Entitlement to Input Service Credit on Goods Transport Agency Service:
The appellant, a manufacturer of excisable goods, availed input service credit of Goods Transport Agency Service based on the service tax paid by the transporter. The Revenue contended that the appellant should have paid the service tax on the service and thus were not entitled to the credit. The Commissioner (Appeals) upheld this view, leading to the dismissal of the appeal. However, the Tribunal found that the service tax had been paid on the service, and the appellant had rightfully availed the credit. The Tribunal emphasized that any payment towards duty or service entitles the recipient to input service credit, regardless of who made the payment. Therefore, the Tribunal set aside the impugned order, ruling in favor of the appellant.

Requirement of Payment of Service Tax on Goods Transport Agency Service:
The Revenue argued that the appellant should have paid the service tax on the Goods Transport Agency Service to be entitled to input service credit. However, the Tribunal held that the service tax had indeed been paid on the service, and the appellant had correctly availed the credit. The Tribunal emphasized that the party making the service tax payment was immaterial, as long as the service had suffered service tax. The Commissioner (Appeals) was criticized for failing to recognize this fact, leading to the decision to set aside the impugned order.

Failure to Comply with Pre-Deposit Directive:
The appellant failed to comply with the pre-deposit directive issued by the Commissioner (Appeals), resulting in the dismissal of the appeal. However, the Tribunal remanded the matter to the Commissioner (Appeals) to decide the issue on merits without insisting on the pre-deposit. This decision enabled the appellant to pursue the appeal further and ultimately led to the favorable judgment by the Tribunal.

Adjudication Order Confirmation by the Commissioner (Appeals):
The Commissioner (Appeals) confirmed the demand, interest, and penalty proposed in the show-cause notice, leading to the dismissal of the appeal due to non-compliance with the pre-deposit directive. However, upon remand by the Tribunal, the Commissioner (Appeals) was directed to reconsider the issue on merits, ultimately resulting in the impugned order being set aside by the Tribunal.

Applicability of Dhampur Sugar Mills Ltd. Case Decision:
The appellant requested the Tribunal to decide the appeal on merits based on the decision of Dhampur Sugar Mills Ltd. vs. CCE. The Tribunal considered this request and proceeded to dispose of the matter. The relevance of the Dhampur Sugar Mills Ltd. case decision in the disposal of the appeal highlights the importance of precedent and case law in legal proceedings.