2016 (11) TMI 242 - AT - Service Tax

Utilization of CENVAT credit for discharge of service tax liability - GTA services - Held that - reliance placed on the decision of COMMISSIONER CENTRAL EXCISE AND CUSTOMS Versus PANCHMAHAL STEEL LTD. 2014 (12) TMI 876 - GUJARAT HIGH COURT where it was held that though the assessee was liable to pay service tax on G.T.A. Service, it could have utilized Cenvat credit for the purpose of paying such duty - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Correct utilization of CENVAT credit for service tax liability on "Goods Transport Agency" services from May 2007 to Feb 08.

Analysis:
1. The judgment deals with two appeals challenging the order-in-appeal dated 10.10.2012. The main issue is whether the appellant correctly utilized CENVAT credit to discharge service tax liability on "Goods Transport Agency" services during a specific period.

2. The appellant had used CENVAT account to pay the service tax liability for the period in question. The Revenue argued that as the recipient of the service, the appellant should have paid the service tax in cash, not through the CENVAT account.

3. The Tribunal found that both lower authorities did not consider the factual scenario accurately. It was noted that the appellant, in this case, was the service provider and had utilized the CENVAT account to discharge the service tax liability during the relevant period.

4. Referring to a previous Tribunal decision in the appellant's own case and a Larger Bench decision in the case of Panchmahal Steel Ltd., which was upheld by the High Court of Gujarat, the Tribunal concluded that the appellant's use of CENVAT credit for service tax liability was valid. Therefore, the Tribunal decided to set aside the impugned orders and allowed the appeals with any consequential relief.

5. The judgment highlights the importance of correctly interpreting the legal provisions regarding the utilization of CENVAT credit for service tax liabilities and emphasizes the need for consistency in decisions based on precedents and established principles.