2008 (3) TMI 177 - AT - Service Tax

Goods Transport Agency - applicant is both a recipient of service as well as a deemed Service tax provider - As a deemed Service tax provider, the duty has been paid by them from Cenvat account and the question of their preparing TR-6 challan does not arise - payment of Tax and eligibility to the credit is not in dispute therefore, the invoice prepared by the applicant to themselves indicating the Service tax paid by them may qualify for taking credit stay granted

Summary

Issues:
1. Interpretation of Rule 2(p) of Cenvat Credit Rules regarding payment of Service Tax by a manufacturer of excisable goods who is a recipient of services from a Goods Transport Agency.
2. Validity of taking credit of Service Tax paid on input services by using Cenvat account and issuing self-invoice.
3. Dispute over the prescribed document for taking credit under Rule 9 of the Cenvat Credit Rules.

Analysis:
1. The judgment revolves around the interpretation of Rule 2(p) of the Cenvat Credit Rules concerning the payment of Service Tax by a manufacturer of excisable goods who is a recipient of services from a Goods Transport Agency. The applicant, in this case, paid the Service Tax as required by the deemed provision under Rule 2(p) and utilized their Cenvat account to pay subsequent liabilities of Service Tax on services received. The Department objected to the credit taken by the applicant, arguing that the invoice issued by the applicant to themselves, indicating the Service Tax paid, was not a prescribed document under Rule 9(1)(e) of the Cenvat Credit Rules.

2. The Tribunal considered the submissions and records, noting that the applicant acted as both a recipient of services and a deemed Service tax provider. The Tribunal observed that since the Service Tax payment was not in dispute and the eligibility for credit was established, the invoice prepared by the applicant to themselves, reflecting the Service tax paid from their Cenvat account, could qualify for taking credit. Therefore, the Tribunal held that the applicant was entitled to the benefit of waiver of dues as per the order of the original authority, ultimately ruling in favor of the applicant.

3. The dispute over the prescribed document for taking credit under Rule 9 of the Cenvat Credit Rules was resolved by the Tribunal's interpretation of the applicant's actions as a deemed Service tax provider. The Tribunal emphasized that the payment of Service Tax was undisputed, and the applicant's method of reflecting the tax paid in their self-invoice was deemed acceptable for claiming credit. Consequently, the Tribunal ordered in favor of the applicant, highlighting the eligibility of the applicant for the benefit of waiver of dues based on the circumstances presented.