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2017 (9) TMI 881 - AT - Service TaxUtilisation of CENVAT credit - credit for payment of service tax on GTA services - reverse charge mechanism - Held that - reliance placed in the case of Commissioner of Service Tax Versus Hero Honda Motors Ltd. 2012 (12) TMI 734 - DELHI HIGH COURT , where it was held that para 2.4.2 of CBEC s Excise Manual of Supplementary Instructions shows that there is no legal bar to the utilisation of Cenvat credit for the purpose of payment of service tax on the GTA services - appeal allowed - decided in favor of appellant.
Issues:
Denial of utilization of Cenvat credit for payment of service tax on GTA services. Analysis: The appellant, M/s Shree Shyam Filaments, appealed against the denial of utilization of Cenvat credit for paying service tax on GTA services under reverse charge mechanism. The main issue revolved around the denial of utilizing Cenvat credit despite having a sufficient balance in the credit pool. The Hon'ble Delhi High Court's decision in CST v/s Hero Honda Motors Ltd. was cited, emphasizing the legality of using Cenvat credit for service tax payment on GTA services. The Punjab and Haryana High Court's ruling in CCE v. Nahar Industrial Enterprises Ltd. supported the utilization of Cenvat credit for service tax payment, in line with Rule 3(4)(e) of the Cenvat Credit Rules, 2004. The High Court's reliance on Rule 3(4)(e) of the Cenvat Credit Rules, 2004 was crucial, highlighting that Cenvat credit could be used for paying service tax on any output service. The Finance Act, 1994, specifically Section 68, mandated the payment of service tax by service providers, further supporting the appellant's right to utilize Cenvat credit for service tax payment. The Court agreed with the Punjab and Haryana High Court's decision in Nahar Industrial Enterprises Ltd., emphasizing that the appellant was entitled to use Cenvat credit for service tax payment on GTA services. In conclusion, the appeal was allowed based on the legal provisions and precedents cited, setting aside the impugned order and granting consequential relief, if applicable, to the appellant. The judgment favored the appellant, upholding their right to utilize Cenvat credit for paying service tax on GTA services, as per the relevant legal framework and court decisions.
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