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2008 (3) TMI 170 - AT - Service TaxWhether Cenvat credit could be availed of the duty paid on input capital goods and the service tax paid on input services as a manufacturer of excisable goods and be utilized towards payment of Service Tax on service availed from GTA - service provided by him will be deemed to be an output service u/r 2 - prima facie, of the view that the appellant is entitled to avail of Cenvat credit towards payment of service tax on the output service - stay application is thus allowed
Issues involved:
Whether Cenvat credit can be utilized for payment of service tax on services availed from a goods transport agency. Analysis: The appeal before the Appellate Tribunal CESTAT NEW DELHI involved the issue of waiver of pre-deposit and stay concerning the requirement for the appellant to pre-deposit Service Tax of Rs. 6,34,216/- in cash and interest. The central issue was whether Cenvat credit could be availed to pay the duty on input capital goods and service tax on input services as a manufacturer of excisable goods for the payment of Service Tax on services obtained from a goods transport agency. The Cenvat Credit Rules, 2004, allow for the utilization of Cenvat credit for the payment of service tax on any output service. During the hearing, the question arose as to whether the appellant could be considered the provider of any output service, as defined in the Rules. The term 'provider of taxable service' includes "a person liable for paying service tax," and as the appellant is liable to pay service tax for services received from the goods transport agency, they are deemed to be the provider of taxable service and, consequently, the service provided by them is deemed to be an output service. Therefore, the appellant is entitled to avail of Cenvat credit towards the payment of service tax on the output service, indicating that the impugned order directing the appellant to pay service tax in cash may not align with the law. The Tribunal held that the appellant is entitled to a full waiver of the pre-deposit, and the stay application was allowed accordingly. This decision was dictated and pronounced in the open Court on the 14th day of March, 2008.
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