2019 (3) TMI 670 - AT - Service Tax

Utilization of CENVAT Credit - can credit can be utilized for payment of Inwards Transportation Service or not? - Held that - The said issue has been settled by the Hon ble Punjab & Haryana High Court in the case of CCE vs. Nahar Industrial Enterprises Ltd. 2010 (5) TMI 608 - PUNJAB AND HARYANA HIGH COURT , wherein it has been held that for payment of Inwards Transportation Service, the Cenvat credit account can be utilized - demand do not sustain. Levy of service tax - Outwards Transportation Service - Held that - On the service of transportation, the transporter has already paid the service tax. In that circumstance, the appellant is not required to pay the service tax. If service tax is paid by the appellant, the same amount shall be double payment of service tax paid by the appellant on the same service - demand do not sustain. Appeal allowed in toto.

Summary

Issues:
- (A) Whether the appellant can utilize the Cenvat Credit account for payment of Inwards Transportation Service or not?
- (B) Whether the service tax is paid by the transporter on Outwards Transportation Service, the appellant is required to pay service tax or not?

Analysis:

(A) Utilization of Cenvat Credit for Inwards Transportation Service:
The issue of whether the appellant can utilize the Cenvat Credit account for payment of Inwards Transportation Service was addressed by referring to a precedent set by the Hon'ble Punjab & Haryana High Court in the case of CCE vs. Nahar Industrial Enterprises Ltd. The court held that the Cenvat credit account can indeed be used for payment of Inwards Transportation Service. Following this decision, it was concluded that no demand is sustainable against the appellant in this regard.

(B) Liability for Service Tax on Outwards Transportation Service:
Regarding the payment of service tax on Outwards Transportation Service, it was noted that the transporter had already paid the service tax. Considering this, it was determined that the appellant is not required to pay the service tax on the same service, as it would result in double payment. Therefore, the demand for service tax on Outwards Transportation Service was deemed unsustainable against the appellant.

In light of the above analysis, it was concluded that the appellant is not liable to pay any service tax. Consequently, the impugned order was deemed to lack merit and was set aside. As a result, the appeal was allowed with any consequential relief that may be applicable.