2009 (5) TMI 391 - AT - Service Tax

Cenvat Credit- Transport agency s services- the appellants utilized Cenvat Credit for payment of service tax on GTA service. Commissioner (Appeals) observed that utilization of Cenvat credit towards payment of service tax to GTA service is clearly in contravention of provisions of rule 3(4) of Cenvat Credit Rules 2004. In the light of the decision of CCE v. Nahar Industrial Enterprises Ltd. 2007 10 STT 117 (New Delhi - CESTAT) held that order of Commissioner (Appeals) is liable to set-aside and appeal is allowed.

Summary

The Appellate Tribunal CESTAT, New Delhi, in the citation 2009 (5) TMI 391, with P.K. Das as the Judicial Member, heard a case involving the utilization of Cenvat Credit for payment of service tax on GTA service. The Commissioner (Appeals) had ruled that this was in contravention of rule 3(4) of the Cenvat Credit Rules, 2004. However, the Tribunal, citing the case of CCE v. Nahar Industrial Enterprises Ltd., determined that Cenvat Credit can indeed be used by the manufacturer for paying service tax on GTA service. Consequently, the Tribunal set aside the impugned orders, allowing all the appeals with consequential relief. The judgement highlights the importance of understanding and correctly applying the rules governing Cenvat Credit in service tax cases. The decision ultimately favored the appellant due to the specific authorization for utilizing Cenvat Credit for service tax payments. This case emphasizes the significance of legal precedent and the need for a thorough analysis of relevant laws in tax disputes.