2024 (8) TMI 787 - AT - Service Tax

CENVAT Credit - GTA Services - Credit on invoices of Authorized Service Stations for the services provided during the Warranty Period - wrongful availment of benefit of Notification No 19/2003-ST in respect of installation services provided for imported AC. Service Tax on GTA Services payable under Reverse Charge Mechanism through CENVAT Account - HELD THAT - This issue is no longer res-intregra and has been decided in series of decisions referred to by the Appellant during the arguments. In case of COMMISSIONER CENTRAL EXCISE AND CUSTOMS VERSUS PANCHMAHAL STEEL LTD. 2014 (12) TMI 876 - GUJARAT HIGH COURT , Hon ble Gujarat High Court while upholding thje decision of larger bench of tribunal observed ' A combined reading of these statutory provisions would, therefore, establish that though the assessee was liable to pay service tax on G.T.A. Service, it could have utilized Cenvat credit for the purpose of paying such duty.' - thus, there are no merits in the demand made. However as the appellant has already paid the amount in cash no refund shall be admissible to the appellant because the liability to pay the service tax has not been set aside. However the demand for interest of Rs 7,97,345/- made in respect of these amounts is set aside. Availed CENVAT Credit on invoices of Authorized Service Stations for the services provided during the Warranty Period - HELD THAT - This issue is also no longer res-integra. In case of M/S ESCORTS CONSTRUCTION EQUIPMENT LTD. VERSUS CCE, DELHI-IV 2023 (12) TMI 601 - CESTAT CHANDIGARH after taking note of previous decisions on the issue Chandigarh Bench has observed ' this Tribunal in various decisions relied upon by the appellant on identical issues has consistently held that the assessee is entitled to cenvat credit of service tax paid on Repair and Maintenance during the warranty period as the same fall within the ambit of Input Service as provided in Rule 2(l) of CCR, 2004.' - thus, CESTAT has constantly been taking view in respect of admissibility of CENVAT credit in on warranty services provided through third party authorized service centres. Thus there are no merits in this demand and set aside the same. Wrongly Availed the benefit of Notification No 19/2003-ST in respect of installation services provided for imported AC - HELD THAT - In the case of indivisible contracts were the supply or transfer of property in goods was also involved along with the provision of service of erection, installation and commissioning no service tax could have been levied prior to 01.06.2007. As the service tax itself was not leviable in respect of these services provided by the appellant, then question of admissibility of abatement/ exemption under N/N. 19/2003-ST becomes irrelevant. Hence there are no merits in the demand made by disallowing the benefit of said notification. As all the demands are set aside on merits, the demand of interest and also the penalties imposed on appellant are set aside. Appeal allowed.

Summary

Issues Involved:
1. Service Tax on GTA Services through CENVAT Account.
2. Availed CENVAT Credit on invoices of Authorized Service Stations for the services provided during the Warranty Period.
3. Wrongly Availed the benefit of Notification No. 19/2003-ST in respect of installation services provided for imported AC.

Issue-wise Detailed Analysis:

1. Service Tax on GTA Services through CENVAT Account:

The Tribunal found that this issue had already been settled in various judicial decisions. It referred to the Gujarat High Court's decision in Panchmahal Steel, which upheld the utilization of CENVAT credit for paying service tax on Goods Transport Agency (GTA) services. The Tribunal noted that the appellant had already paid the amount in cash and thus, no refund would be admissible. However, the demand for interest amounting to Rs. 7,97,345/- was set aside.

2. Availed CENVAT Credit on invoices of Authorized Service Stations for the services provided during the Warranty Period:

The Tribunal referred to multiple decisions, including those of the Chandigarh Bench in Escorts Construction Equipment Ltd. and JCB India Ltd., which consistently held that CENVAT credit on repair and maintenance services during the warranty period is admissible. The Tribunal concluded that the appellant correctly availed CENVAT credit for these services and set aside the demand.

3. Wrongly Availed the benefit of Notification No. 19/2003-ST in respect of installation services provided for imported AC:

The Tribunal disagreed with the findings in the impugned order, which had denied the benefit of Notification No. 19/2003-ST due to the appellant's alleged availing of CENVAT credit on inputs, capital goods, and input services. The Tribunal referred to the Supreme Court's decision in Larsen and Toubro, which clarified that service tax on indivisible works contracts (involving both goods and services) was not leviable before 01.06.2007. Consequently, the Tribunal held that the service tax itself was not leviable on such services provided by the appellant, rendering the question of abatement/exemption under Notification No. 19/2003-ST irrelevant. The demand and associated penalties were set aside.

Conclusion:

The Tribunal set aside all demands on merits, including the demand for interest and penalties. The appeal was allowed in favor of the appellant. The judgment emphasized that the issues had already been settled in previous judicial decisions and that the appellant's actions were in compliance with the prevailing legal provisions.

(Pronounced in open court on-08 August, 2024)