2008 (10) TMI 22 - AT - Service Tax

Cenvat credit was denied in respect of input service relating to GTA service only on the ground that the credit has been availed on the strength of TR-6 challan - we find that with effect from 16.6.2005 the TR-6 challan was included in the list of valid document for taking credit by Notification No. 28/2005-CE. In these circumstances, we agree with the contention of the appellant credit denial was not justified appeal of assessee is allowed

Summary

Issues:
Appeal against denial of Cenvat credit for GTA service based on TR-6 challan validity before and after Notification No. 28/2005-CE.

Analysis:
The appellant contested the denial of Cenvat credit for input service related to GTA service, citing Notification No. 28/2005-CE, which validated TR-6 challans for credit purposes effective from 16.6.2005. The appellant argued that prior to this notification, TR-6 challans were not considered valid duty paying documents for credit. The appellant relied on precedents like the CCE Vs. Crompton Greaves Ltd. and CCE Vs. Essel Pro-Pack Ltd., where credit was allowed based on TR-6 challans even before the notification. The Revenue contended that as TR-6 challans were not valid during the relevant period, credit availed using them was rightfully denied.

The Tribunal examined previous cases where credit was allowed based on TR-6 challans for Service Tax paid on services received by the manufacturer. The Tribunal referenced the case of CCE Vs. Essel Pro-Pack Ltd., where it was held that TR-6 challans, though not initially specified, became valid for availing credit post the notification. The Tribunal agreed with the Commissioner (Appeals) that TR-6 challans were proper documents for availing service tax credit when no specified documents existed during the relevant period. It was noted that the Revenue did not challenge the validity of TR-6 challans as the basis for credit, nor disputed the payment of service tax by the appellant.

Considering the inclusion of TR-6 challans as valid documents for credit post the notification, the Tribunal sided with the appellant's argument. The impugned order denying credit was set aside, and the appeal was allowed. The judgment emphasized the significance of TR-6 challans as primary documents reflecting duty payment, especially in the absence of specified documents for credit during the relevant period. The decision highlighted the rectification of the omission regarding TR-6 challans through the notification, reinforcing their validity for availing Cenvat credit.