2014 (8) TMI 375 - AT - Service Tax

CENVAT Credit - duty paying documents - Availment on basis of non prescribed documents - Held that - Appellant had discharged the service tax liability by paying service tax through TR-6 challan and that is the document, which evidences payment of tax and it is on the basis of such payment, input service tax credit can be availed. Prior to 16-6-2005, there was a lacuna in the Rule and the Rule did not prescribe TR-6 challan as document for availing the credit. The same was rectified by amending the Rules. The amendment is only a correction of lacuna in the Rule and therefore, it is operational retrospectively. Even otherwise, for availment of credit it is duty paying document that is relevant and in the instant case, the duty paying document is TR-6 challan and therefore, the Cenvat credit has been rightly availed on the strength of TR-6 challan through which the service tax has been paid - Following decision of Essel Propack Ltd. 2007 (9) TMI 43 - CESTAT, MUMBAI and Crompton Greaves Ltd. 2008 (1) TMI 173 - CESTAT, MUMBAI - Decided in favour of assessee.

Summary

Issues:
Challenge to availment of service tax credit based on TR-6 challan.

Analysis:
The appeal and stay application were filed against an order passed by the Commissioner of Central Excise (Appeals), Mumbai-II. The appellant, M/s. Fibre Foils Ltd., had paid Service Tax on GTA services received and availed service tax credit based on TR-6 challan. The department contended that TR-6 challan was not a prescribed document for availing credit. The Deputy Commissioner confirmed the demand, imposed a penalty, and the lower appellate authority dismissed the appeal, leading to the current appeal.

The appellant argued that in the case of GTA service, the recipient is liable for service tax payment, and TR-6 challan serves as evidence of such payment, making it eligible for credit. The appellant cited precedents like Essel Propack Ltd. and Crompton Greaves Ltd., where TR-6 challan was considered a valid document for availing credit. The appellant sought allowance of the appeal based on these arguments.

The Revenue reiterated the lower authority's findings, opposing the appellant's contentions. The Tribunal, after considering both sides' submissions, noted that the appellant had paid service tax through TR-6 challan, which served as evidence of tax payment and enabled credit availment. The Tribunal highlighted a lacuna in the Rule before an amendment rectified it, making TR-6 challan a valid document retrospectively. Emphasizing the importance of the duty paying document for credit availment, the Tribunal aligned with the decisions in Essel Propack Ltd. and Crompton Greaves Ltd. cases, allowing the appeal and granting consequential relief.

In conclusion, the Tribunal allowed the appeal, supported by the retrospective validity of TR-6 challan as a duty paying document for service tax credit availment. The decision was in line with established precedents, providing relief to the appellant.