2015 (10) TMI 1056 - HC - Service Tax

CENVAT Credit - whether the assessee was entitled to avail credit of service tax on the basis of TR-6 challans prior to 16.06.2005 as TR-6 challan was included as a specified document vide Notification No. 28/2005-CE(NT) dated 07.06.2005 with effect from 16.06.2005 - Held that - Issue involved in these appeals, is no more res integra in view of the decision rendered by the Tribunal in the case of Commissioner of Central Excise, Goa, vs. Essel Pro-pack Ltd. reported in 2007 (9) TMI 43 - CESTAT, MUMBAI - decision of the Tribunal was affirmed by a Division Bench of the Bombay High Court in Commissioner of Central Excise v. Essel Propack Ltd., 2015 (5) TMI 529 - BOMBAY HIGH COURT - first respondent is entitled to avail credit of service tax on the basis of TR-6 Challan. - Decided against Revenue.

Summary

Issues:
Whether the assessee was entitled to avail credit of service tax on the basis of TR-6 challans prior to 16.06.2005 as TR-6 challan was included as a specified document vide Notification No. 28/2005-CE(NT) dated 07.06.2005 with effect from 16.06.2005.

Analysis:

1. The assessee, engaged in the manufacture of Motor vehicles, availed inadmissible service tax credit on Goods Transport Agency Services prior to the issuance of Notification No. 28/2005-CE dated 07.06.2005. The Department contended that the credit was recoverable under Rule 14 of Cenvat Credit Rules, 2004. The Tribunal allowed the appeals filed by the assessee, leading to the Department filing the present appeals.

2. The core issue revolved around whether the assessee could avail credit of service tax based on TR-6 challans before 16.06.2005. The Tribunal's decision in the case of Commissioner of Central Excise, Goa, vs. Essel Pro-pack Ltd. held that TR-6 challan was a proper document for availing credit, even if not listed as a specified document at the relevant time. The decision was further affirmed by the Bombay High Court in Commissioner of Central Excise v. Essel Propack Ltd.

3. The Punjab & Haryana High Court's judgment in Commissioner of Central Excise, Ludhiana vs. Ralson India Ltd. supported the acceptance of duty paid inputs if their utilization in the final product was not disputed. The Department's Circular also emphasized entitlement to CENVAT credit on genuine duty paid inputs. In the present case, the authorities accepted the entitlement of the assessee to CENVAT Credit, with the only contention being the type of document required for availing such credit.

4. Ultimately, the High Court concurred with the law established in the above decisions, ruling in favor of the assessee. It held that the assessee was entitled to avail credit of service tax on the basis of TR-6 Challan. The substantial question of law was answered in favor of the assessee, and the appeals were disposed of without costs.