2009 (8) TMI 392 - AT - Service Tax

Transport of goods- Cenvat Credit-output service-Notification No. 32/2004-ST dated 3.12.2004- Assessee, a recipient of goods transport service paid service tax by availing abatement of 75 percent of freight paid by it in terms of Notification No. 32/2004-ST, dated 3.12.2004. Revenue denied said benefits and demanded service tax short paid. In the light of the judgment of Andhra Pradesh Paper Mills Ltd. v. 2007 -TMI - 1909 - CESTAT, BANGALORE held that- the assessee was eligible for the amatement. - Assessee paid service tax on freight charges incurred on transportation of goods by utilizing Cenvat credit. Revenue denied the said credit and demanded service tax on ground that services of transportation of goods by road in goods carriage constitute input service for manufacture of excisable goods and assessee was not eligible to utilize accumulated cenvat credit for payment of service tax on freight and same had to be discharged by way of cash payment through TR-6. in the light of the decision of Andhra Pradesh Paper Mills Ltd. v. 2007 -TMI - 1909 - CESTAT, BANGALORE, held that- issue is settled in favour of assesse, thus the appeal filed by revenue are rejected.

Summary

The Appellate Tribunal CESTAT, Bangalore, in the 2009 case of M.V. Ravindran and P. Karthikeyan, considered two appeals filed by the Revenue against Orders-in-Appeal No. 10/2008(G) ST and No. 25/2008(G) ST. The primary issue involved in these appeals was the short payment of Service Tax by the respondent due to irregular abatement of freight charges. Another issue was the incorrect utilization of Cenvat credit for paying Service Tax and education cess on freight charges. The adjudicating authority confirmed the demand and interest under the Finance Act, 1994. The Commissioner (Appeals) set aside the order, leading to the Revenue's appeal. The Tribunal heard arguments from both sides and reviewed the case law. Ultimately, the Tribunal found in favor of the respondents, stating that the issues were no longer open to debate and were settled in favor of the respondents. The appeals filed by the Revenue were rejected. This judgment clarifies the proper utilization of Cenvat credit and Service Tax liability on transportation charges.