2017 (5) TMI 279 - AT - Central Excise

CENVAT credit - GTA service (inward freight) - whether the appellants are eligible to avail CENVAT credit of the service tax paid on GTA service (inward freight) against GAR-7 challan? - Held that - appellant had availed credit on documents prescribed u/r 9(1)(e) of CCR, 2004 under which service tax was paid on GTA service albeit for the past period against GAR-7 Challan - issue is no more res integra being covered by the decision in the case of JSW Steel Ltd. vs. C.C.E., Salem 2008 (9) TMI 74 - CESTAT, CHENNAI , where it was held that Documents for availment of credit of service tax paid on input services were those referred to under clauses (e), (f) and (g) of sub-rule (1) of Rule 9 - appeal allowed - decided in favor of appellant.

Summary

Issues:
Whether the appellants are eligible to avail CENVAT credit of the service tax paid on GTA service against GAR-7 challan.

Analysis:
The case involved three appeals against the Order in-Appeal passed by the Commissioner. The appellants, engaged in manufacturing excisable goods, availed CENVAT credit on input services, including GTA service. A show cause notice was issued for recovery of the credit, interest, and penalty. The Department contended that credit on service tax paid on GTA service could only be availed on a supplementary invoice, not against a GAR-7 challan. The appellants argued that they availed credit correctly under Rule 9(1)(e) of CENVAT Credit Rules, 2004. Reference was made to a Division Bench judgment in a similar case.

The Advocate for the appellants highlighted that the Department proceeded with a wrong notion regarding the availed credit. The Department claimed that since the service tax was paid after an audit objection, the subsequent payment through GAR-7 challan was inadmissible. However, the Tribunal found no merit in the Revenue's argument. Referring to the Division Bench judgment, the Tribunal concluded that the invoices issued by the input service provider did not fall under the clause applicable to supplementary invoices. The Tribunal upheld that the appellants were entitled to avail credit of the service tax paid on input services as per Rule 9(1)(e) of the CENVAT Credit Rules, 2004.

In the final decision, the Tribunal set aside the impugned order and allowed the appeals, providing consequential relief as per the law. The judgment reiterated the Division Bench's observation, emphasizing that the appellants correctly availed the CENVAT credit. The Tribunal's decision was based on the interpretation of relevant legal provisions and previous judgments, ensuring the appellants' eligibility for the credit against the GAR-7 challan.