2008 (2) TMI 365 - AT - Service Tax

Utilisation of credit - confirmation of demand of Service tax on the ground that the appellant has used the cenvat credit for discharging the service tax liability on the services provided by GTA to the appellant - issue of utilization of cenvat credit for the payment of the service tax liability by the recipient of the services of GTA i.e. current appellant is settled by various orders of Tribunal in favour of appellant hence impugned order barring credit utilization is set aside

Summary

Issues:
Confirmation of demand of service tax, utilization of cenvat credit for service tax liability, applicability of various tribunal decisions.

Analysis:
The judgment revolves around a stay application concerning the confirmation of a demand amounting to Rs.4,67,139/- along with Education Cess and penalty under the Finance Act, 1944. The issue pertains to the utilization of cenvat credit for discharging service tax liability on services provided by a Goods Transport Agency to the appellant. The Adjudicating authority and the Commissioner (Appeals) held against the appellant, stating that cenvat credit cannot be used for service tax on output services provided by a GTA. The key contention was that the consignor or consignee, although liable to pay service tax, does not actually provide any taxable service, as the service is rendered by the GTA. The appellant argued that the issue is settled by various tribunal decisions, citing specific cases to support their claim.

The Tribunal analyzed the definitions of 'output service' and 'provider of taxable service' under the Cenvat Credit Rules to determine the applicability of cenvat credit for service tax liability in the case of services provided by a GTA. The Tribunal agreed with the appellant's contention that the issue is no longer res integra and is settled by previous tribunal decisions. It was established that the appellant had indeed utilized cenvat credit for discharging service tax liability on services received from the GTA. Therefore, the Tribunal found the impugned order unsustainable in light of the series of tribunal judgments supporting the appellant's position.

Conclusively, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellant. The judgment highlights the significance of precedent and established tribunal decisions in resolving legal disputes concerning the utilization of cenvat credit for service tax liabilities, particularly in cases involving services provided by Goods Transport Agencies.