2014 (5) TMI 614 - AT - Service Tax

Demand of service tax - CENVAT Credit - Goods Transport Agency - appellant pays tax on output service being Authorised Service station and Business Auxiliary Service - Held that - Following decision of Badrika Motors (P) Ltd. Vs. CCE, Bhopal 2014 (1) TMI 316 - CESTAT NEW DELHI - Decided in favour of assessee.

Summary

Issues:
1. Disallowance of input service credit on Goods Transport Agency (GTA) services for sales of motor cycles.
2. Applicability of input service tax credit for GTA services in the context of integrated sales and service activities.

Analysis:
Issue 1: The appellant, an authorized dealer for sales and services of motor cycles, paid service tax on GTA services related to transportation from the manufacturer to its premises. The Revenue disallowed input service credit on GTA services, claiming it was for sales, not servicing. The Commissioner (Appeal) upheld the decision, leading to the appeal before the Tribunal.

Issue 2: The appellant argued that the sales and service agreement with the manufacturer constituted an integrated activity, allowing input service tax credit for GTA services received at its premises. Citing precedents like CCE vs. Shariff Motors and Badrika Motors (P) Ltd. Vs. CCE, the appellant contended that input for GTA services is admissible under the Act. The Departmental Representative (DR) maintained that GTA services were used for sales, justifying the disallowance.

Judgment: The Tribunal, considering the matter's coverage by the Division Bench's decisions, allowed the appeal in favor of the appellant. The ruling emphasized the integration of sales and service activities, aligning with precedents supporting the admissibility of input service tax credit for GTA services. Consequently, the appeal was allowed with any consequential relief, and the stay application was disposed of.