2013 (6) TMI 169 - AT - Service Tax

Cenvat Credit on service tax on inward transportation - removal of inputs as such - reversal of cenvat credit - held that - here is no dispute that the appellant at the time of clearance of Cenvat credit availed inputs, as such, had paid an amount equal to the Cenvat credit actually availed in terms of the provisions of Rule 3 (5) of the Cenvat Credit Rules, 2004. The dispute is as to whether in respect of the same inputs, the appellant are also required to reverse the Cenvat credit of service tax paid on the GTA service availed for bringing those inputs to the factory. In view of decisions in Bassi Alloys P. Ltd. vs. CCE, Chandigarh 2010 (1) TMI 308 - CESTAT, MUMBAI , A.R. Casting (P) Ltd. vs. CCE, Chandigarh 2009 (12) TMI 182 - CESTAT, NEW DELHI & the judgment of Hon ble Punjab & Haryana High Court in the case of CCE, Chandigarh-I vs. Punjab Steels 2010 (7) TMI 252 - PUNJAB AND HARYANA HIGH COURT , decided in favor of assessee.

Summary

Issues:
- Whether the appellant is required to reverse the Cenvat credit of service tax paid on GTA service availed for bringing inputs to the factory.

Analysis:
The appellant, a manufacturer of steel M.S. Ingots, removed certain Cenvat credit availed inputs and paid an amount equal to the Cenvat credit actually availed as per Rule 3(5) of the Cenvat Credit Rules, 2004. However, the department issued a show cause notice to reverse the Cenvat credit of service tax paid on GTA service availed for bringing those inputs to the factory. The Jurisdictional Assistant Commissioner confirmed a Cenvat credit demand along with interest and penalty, which was upheld by the Commissioner (Appeals). The appellant appealed against this decision.

The appellant's counsel cited relevant judgments of the Tribunal and the Hon'ble Punjab & Haryana High Court, arguing that the issue had been decided in favor of the appellant in similar cases. The Departmental Representative defended the impugned order based on the Commissioner (Appeals) findings.

The judge, after considering submissions from both sides and perusing the records, noted that the appellant had already paid the amount equal to the Cenvat credit actually availed for the inputs in question. The key dispute was whether the appellant was also required to reverse the Cenvat credit of service tax paid on the GTA service used to bring those inputs to the factory. The judge referred to previous Tribunal judgments and the Hon'ble Punjab & Haryana High Court judgment that had already decided this issue in favor of the appellant. Consequently, the judge found the impugned order unsustainable and set it aside, allowing the appeal in favor of the appellant. The judgment was pronounced in open court by the judge.