2018 (4) TMI 416 - HC - Central Excise

Utilization of accumulated CENVAT credit for the payment of service tax - recipient of service - GTA service - amendment of Rule 2(p) of CCR 2004 vide N/N. 8/2006-CE(NT) dated 19.04.2006 - April 2007 to March 2008 - Held that - the judgment of the Larger Bench of the Tribunal, referred in the impugned order, concerns a prior period, namely, 1st January, 2005 to 31st March, 2006 - the Tribunal could have examined the matter in the light of the fact that there is no judgment of the jurisdictional High Court and/or otherwise. It is only in the absence of a view taken by either the Hon ble Supreme Court of India or the jurisdictional High Court that the Tribunal could have followed the view taken by the other High Courts. The Appeal shall now be re-heard by the Tribunal on its own merits and in accordance with law, totally uninfluenced by any earlier conclusions.

Summary

Issues:
1. Eligibility to utilize CENVAT credit for service tax payment.
2. Tribunal's order challenge regarding CENVAT credit utilization.
3. Applicability of Larger Bench decision on CENVAT credit utilization.
4. Jurisdictional High Court's judgment absence in the matter.

Analysis:
1. The main issue in this case is the eligibility of the assessee to use CENVAT credit accumulated from manufacturing activities for paying service tax as a recipient under the category of 'Goods Transport Agency' during April 2007 to March 2008. The Tribunal's order challenged this eligibility, leading to the appeal before the High Court.

2. The Tribunal's order, based on a cryptic decision, disposed of the appeal challenging the Commissioner's order. The Tribunal acknowledged the settled law by a Larger Bench regarding CENVAT credit utilization for service tax on Goods Transport Agency service. The High Court set aside the Tribunal's order, emphasizing the need for a detailed examination in the absence of jurisdictional High Court's judgment.

3. The Tribunal referred to a Larger Bench decision concerning a prior period, which allowed utilizing CENVAT credit for service tax payment. The High Court highlighted the importance of examining the legislative amendments' impact on earlier judicial orders and directed the Tribunal to rehear the appeal independently, considering the legislative changes and any conflicting judicial precedents.

4. The absence of a specific judgment from the jurisdictional High Court raised concerns about following the Larger Bench decision without a detailed analysis. The High Court quashed the Tribunal's order and instructed a fresh hearing, emphasizing the need to assess the legislative amendments' effect on existing judicial decisions and keeping all legal contentions open for consideration.