2015 (12) TMI 262 - AT - Service Tax

Denial of CENVAT Credit - GTA service - Held that - As per Rule 3(1) of the Cenvat Credit Rules, 2004 a manufacturer of dutiable excisable goods can take credit of input services received by him. In the present facts, freight is paid by M/s. Parle Products Pvt. Limited and not by the appellant. The Service Tax paid under the challans on reverse charge basis has thus, to be considered as Service Tax paid by M/s. Parle Products, Pvt. Limited and not by the appellant. Cenvat credit of such Service Tax paid is not admissible to the appellant. - Decided in favour fo Revenue.

Summary

Issues:
1. Admissibility of Cenvat credit on inward freight to the job worker.
2. Permissibility of actual payment of Service Tax on GTA services under challans in the name of the appellant.
3. Appeal filed by the Revenue regarding Cenvat credit.

Analysis:
The judgment by the Appellate Tribunal CESTAT AHMEDABAD involved multiple issues concerning Cenvat credit and Service Tax payments. The first issue revolved around the admissibility of Cenvat credit on inward freight to the job worker. The Revenue argued that the entire amount of freight and Service Tax was paid by M/s. Parle Products Pvt. Limited, but the actual payment of Service Tax on GTA services under challans was made in the name of the appellant, which was deemed impermissible under the Cenvat Credit Rules, 2004. The first appellate authority had allowed Cenvat credit on inward freight to the job worker, leading the Revenue to file an appeal.

Upon hearing the arguments and reviewing the case records, the Tribunal noted that as per Rule 3(1) of the Cenvat Credit Rules, 2004, a manufacturer of dutiable excisable goods could take credit of input services received by them. In this case, it was established that the freight was paid by M/s. Parle Products Pvt. Limited and not by the appellant. Therefore, the Service Tax paid under the challans on a reverse charge basis was considered as paid by M/s. Parle Products Pvt. Limited and not by the appellant. Consequently, the Tribunal concluded that Cenvat credit of such Service Tax paid was not admissible to the appellant. As a result, the appeals filed by the appellant were rejected on both merits and for non-prosecution, while the appeal filed by the Revenue was allowed.

In summary, the judgment addressed the issues of Cenvat credit on inward freight, permissibility of Service Tax payments under challans, and the admissibility of such credits under the Cenvat Credit Rules, 2004. The decision emphasized the importance of correctly attributing payments and credits in line with the legal provisions governing such transactions.