2015 (10) TMI 1052 - AT - Service Tax

GTA Service - CENVAT Credit - whether appellant can take credit of duty, paid on reverse charge basis under GTA Services initially from CENVAT credit - Held that - On being pointed out by the audit the entire amount was paid in cash and appellant took re-credit of duty paid initially from Cenvat Credit Account. Appellant relied upon the case law of M/s Ratnamani Metals and Tubes Ltd. vs Commissioner of Central Excise and Service Tax, Ahmedabad-III 2014 (3) TMI 244 - CESTAT AHMEDABAD where under similar factual matters it was held that appellant is entitled to take CENVAT credit suo moto - issue has also been decided in favour of the assessee by Hon ble Gujarat High Court 2014 (3) TMI 316 - GUJARAT HIGH COURT - Decided in favour of assessee.

Summary

Issues:
1. Whether the appellant can take credit of duty paid on reverse charge basis under GTA Services initially from CENVAT credit.
2. Whether the appellant is entitled to take CENVAT credit suo moto without applying for a refund claim.

Analysis:
1. The appellant filed an appeal against OIA No. SRP/204/VAPI/2012-13, concerning the issue of taking CENVAT credit under GTA Services. Initially, duty was paid from the CENVAT Credit Account, but after audit pointed out the discrepancy, the appellant paid the entire amount in cash and took re-credit of the debited amount. The main contention was whether the appellant could take credit of duty paid on reverse charge basis under GTA Services from CENVAT credit. The appellant relied on a relevant case law to support their claim.

2. The Revenue argued that the appellant should have made a refund claim before taking credit and supported the order passed by the first appellate authority. After hearing both sides and examining the case records, it was determined that the appellant had paid the duty in cash after audit intervention and then took re-credit of the amount debited from the CENVAT Credit Account. The appellant's action of taking CENVAT credit suo moto was supported by a case law precedent. The judgment highlighted that the appellant had discharged the duty in cash and was entitled to take CENVAT credit based on the factual matrix and legal provisions.

3. The decision referenced relevant case laws and judicial pronouncements, including the decision of the Hon'ble High Court of Gujarat and Hon'ble High Court of Madras in similar cases, to support the appellant's entitlement to CENVAT credit suo moto. The judgment emphasized that the issue fell within the established legal ratio and was in line with previous judicial decisions. Ultimately, the impugned order was set aside, and the appeal was allowed in favor of the appellant, granting consequential relief.

4. The judgment concluded by noting that the issue had also been decided in favor of the assessee by the Hon'ble Gujarat High Court, further supporting the decision to allow the appeal and set aside the order passed by the first appellate authority. The comprehensive analysis considered legal precedents, factual circumstances, and statutory provisions to determine the appellant's entitlement to CENVAT credit under GTA Services and the validity of taking re-credit suo moto without a refund claim.