2012 (9) TMI 74 - AT - Service Tax

Cenvat credit on GTA services alleged that such credit of tax paid on such services of Goods Transport Agency was taken on documents that are not specified under Rule 9 of Cenvat Credit Rules, 2002 Held that - Rule 9 of the Cenvat Credit Rules does not specify any document based on which the person who is paying Service Tax from PLA account or Cenvat Credit Account as a receiver of service can take credit - matter remanded to the adjudicating authority for de novo consideration

Issues:
1. Interpretation of Rule 9 of Cenvat Credit Rules, 2002 regarding documents for claiming Cenvat credit on services like Goods Transport Agency (GTA) services.
2. Permitted mode of payment for service tax when paid by the receiver of service and whether payment through Cenvat credit account is valid.

Analysis:
1. The case involved a dispute over the admissibility of Cenvat credit on services of Goods Transport Agency (GTA) due to the documents used for claiming such credit. The Appellants, sugar and molasses manufacturers, paid Service Tax as receivers of services and claimed credit based on bills from the GTA provider. However, a Show Cause notice alleged that the credit was taken on documents not specified under Rule 9 of the Cenvat Credit Rules, 2002.

2. The Assistant Commissioner adjudicated the Show Cause Notice, denying the Cenvat credit and imposing a penalty. The Commissioner (Appeals) upheld the decision, leading the Appellants to appeal. The main contention was whether the documents used for claiming credit met the requirements of Rule 9, which did not specify the exact documents necessary for claiming such credit.

3. The Department argued that the Appellants failed to provide proof that the amounts for which credit was taken had been deposited in the Government's account. The lack of specified documents under Rule 9 and absence of proof of deposit led to the denial of credit. The issue raised was the interpretation of Rule 9 concerning the documents required for claiming Cenvat credit.

4. The Tribunal identified two key issues for consideration: the documents eligible for claiming Cenvat credit on services like GTA services and the permitted mode of payment for service tax when paid by the receiver of service. The second issue, regarding the mode of payment, had not been adequately addressed during the case proceedings.

5. The Tribunal acknowledged the importance of clarifying the permitted mode of payment for service tax, especially in cases where payment through Cenvat account might be disputed. The issue of payment through Cenvat credit account versus other modes like challans needed further examination due to ongoing disputes in similar cases.

6. The Tribunal emphasized that Rule 9 did not specify the documents required for claiming Cenvat credit when paying Service Tax from PLA or Cenvat Credit Account. While payment through challan was acceptable, payment via debit entry in Cenvat credit account was also valid. The Tribunal cited precedents to support the validity of payment through Cenvat credit account and emphasized the equivalence of payment methods through PLA and Cenvat credit account.

7. In this specific case, the actual payment of service tax, whether through PLA or RG-23, was not thoroughly examined. The Appellants claimed that the tax was paid through debit in the Cenvat credit account but were unable to provide evidence during the appeal proceedings, highlighting the limitation of presenting new evidence at that stage.

8. Due to the critical issues remaining unresolved and the inadequacy of Rule 9 in addressing the situation, the Tribunal decided to waive the pre-deposit requirement for admission of the appeal. The case was remanded to the adjudicating authority for a fresh consideration of all facts and legal issues raised by the Appellants, emphasizing the need for a clear finding on the payment methods and admissibility of Cenvat credit. The stay petition and appeal were disposed of accordingly.

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