2016 (2) TMI 1324 - HC - Service Tax

Utilisation of CENVAT credit - reverse charge mechanism - HELD THAT - The question of law as framed on behalf of the Appellant in the present appeal following COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH VERSUS M/S NAHAR INDUSTRIAL ENTERPRISES LTD AND OTHERS 2010 (5) TMI 608 - PUNJAB AND HARYANA HIGH COURT has already been decided by a Division Bench of this Court in Union of India v. Mohini Industries 2015 (3) TMI 702 - CHHATTISGARH HIGH COURT taking the same view and additionally relying upon COMMISSIONER OF SERVICE TAX VERSUS HERO HONDA MOTORS LTD. 2012 (12) TMI 734 - DELHI HIGH COURT holding that payment of service tax through reverse charge mechanism by utilisation of CENVAT credit was in accordance with law. Appeal dismissed - decided against Revenue.

Summary

Issues involved: Appeal under Section 35-G of the Central Excise Act, 1944 against service tax payment by reverse charge mechanism through utilization of CENVAT credit.

Analysis:
1. The appeal was filed against the final order passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi. The Appellant raised the issue of service tax payment by reverse charge mechanism through the use of CENVAT credit as a question of law. The Tribunal referred to a previous judgment (2012 (25) STR 129) in CCE v. Nahar Industrial Enterprises, which the department challenged with a Special Leave Petition. The Respondent acknowledged the issue but pointed out that a Division Bench of the same Court had already decided the matter in Tax Case Nos. 44 and 46 of 2007 (Union of India v. Mohini Industries) on 13.12.2012, supported by another case (2013 (29) STR 358) Commissioner of Service Tax v. Hero Honda Motors Ltd., affirming the legality of service tax payment through reverse charge mechanism using CENVAT credit.

2. The Court noted that the Division Bench had already addressed the same legal question in Tax Case Nos. 44 and 46 of 2007 (Union of India v. Mohini Industries) and had ruled in favor of the legality of service tax payment through reverse charge mechanism by utilizing CENVAT credit. As the issue had been conclusively settled by the Division Bench, the Court found no reason to entertain the present appeal or formulate any new legal questions for consideration. Consequently, the Court dismissed the appeal based on the precedents and legal clarity provided by the previous judgments on the matter.