2009 (4) TMI 340 - AT - Service Tax

Cenvat Credit- output services- whether the credit availed on inputs and capital goods and input services can be utilized for discharging the liability of service tax on GTA Services? In the light of the decision of Prakriti Industries dated 22-6-2007, Commissioner (Appeals) held that credit can be utilized. Tribunal also upheld the order of Commissioner (Appeals).

Summary

Issues:
- Whether the credit availed on inputs, capital goods, and input services can be used for discharging the liability of Service Tax on GTA services.

Analysis:
The Appellate Tribunal CESTAT, New Delhi, heard an appeal filed by the Revenue against the order of the Commissioner (Appeals) where the adjudication order was set aside. The key issue in this case was whether the credit availed on inputs and capital goods, along with input services, could be utilized for discharging the liability of Service Tax on GTA services. The Commissioner (Appeals) had set aside the Adjudication Order based on previous Tribunal decisions, specifically citing the cases of CCE v. Nahar Industrial Enterprises Ltd. and Prakriti Industries. The Tribunal's order emphasized that sub-rule (4) of rule 3 of Cenvat Credit Rules, 2004 allows for the utilization of credit for payment of excise duty and service tax on any output service. The Tribunal concluded that the Appellant, being treated as a service provider when paying service tax on transport service, could utilize the credit for discharging the service tax liability on output services, as supported by previous decisions.

Therefore, based on the Tribunal's previous decisions and the interpretation of the Cenvat Credit Rules, the Judicial Member found no reason to interfere with the order of the Commissioner (Appeals). Consequently, the appeal filed by the Revenue was rejected.