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2020 (3) TMI 847 - AT - Service TaxGTA Services - appellant paid amount towards transportation of goods - reverse charge mechanism - revenue neutrality - HELD THAT - The appellant is entitled to get the benefit of CENVAT credit on the GTA services, therefore, making the situation revenue neutral. It is further observed that this Tribunal in the case of M/S STAR ALLOYS CHEMICALS PVT. LTD. VERSUS CCE ST, RAIPUR 2018 (4) TMI 363 - CESTAT NEW DELHI , wherein in identical situation has held that in the case of GTA service, CENVAT credit is available, therefore extended period cannot be invoked. Normal period of limitation - HELD THAT - Hon ble Supreme Court in the case of COMMISSIONER OF C. EX., PUNE VERSUS COCA-COLA INDIA PVT. LTD. 2007 (4) TMI 17 - SUPREME COURT , COMMISSIONER OF C. EX. CUS., VADODARA VERSUS NARMADA CHEMATUR PHARMACEUTICALS LTD. 2004 (12) TMI 93 - SUPREME COURT , has held that if there is no revenue implication involved, then no tax is required to be paid. It has been further held that, if for the same assessee, tax paid is modavable/cenvatable, then no tax is required to be paid - the appellant is not liable to pay tax for normal period of limitation as well. Further, the appellant has deposited an amount of ₹ 6,50,002/- during the course of investigation, and on specific query, it has been replied by the appellant that they have taken CENVAT Credit on the same. Therefore, that amount needs to be confirmed, as they have already taken the credit. Therefore, the balance service tax demand along with interest and penalty are not sustainable in the eyes of law and is hereby set aside. Appeal allowed on merits as well as on limitation.
Issues:
1. Liability to pay service tax under Goods Transport Agency (GTA) category 2. Invocation of extended period of limitation 3. Availability of CENVAT credit 4. Sustainability of interest and penalty Liability to pay service tax under GTA category: The appellant, a manufacturer of excisable goods, was found liable to pay service tax under the GTA category as a service recipient under Reverse Charge Mechanism (RCM). A show cause notice was issued demanding service tax, interest, and penalty. The appellant contested the allegations, but the demand was confirmed by the Adjudicating Authority and the Commissioner. The appellant appealed to the Tribunal challenging the order. Invocation of extended period of limitation: The appellant argued that the extended period of limitation cannot be invoked in a revenue-neutral situation. They relied on legal precedents to support their claim, emphasizing the absence of mala fide intent and the need for evidence to prove the same. The Tribunal agreed, noting that the department failed to establish mala fide on the part of the appellant, thereby ruling the show cause notice as barred by limitation. Availability of CENVAT credit: The appellant contended that if liable to pay service tax on GTA, they should be entitled to CENVAT credit, making the situation revenue neutral. Citing relevant judgments, the Tribunal held that in a revenue-neutral scenario where CENVAT credit is available, the extended period cannot be invoked. The appellant's entitlement to CENVAT credit on GTA services was acknowledged, leading to the setting aside of the demand. Sustainability of interest and penalty: The Tribunal examined the sustainability of interest and penalty, considering the appellant's compliance with depositing an amount during the investigation and availing CENVAT credit. The Tribunal found the balance service tax demand, interest, and penalty to be unsustainable in the eyes of the law, setting them aside while confirming a specific amount already credited by the appellant. In conclusion, the Tribunal set aside the impugned order, allowing the appeal on merits and limitation, with consequential relief to the appellant, except for the confirmed amount subject to CENVAT credit. The judgment was pronounced in open court on 28 February 2020.
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