2018 (2) TMI 1391 - AT - Central Excise

Transfer of CENVAT credit - whether appellant have rightly transferred the CENVAT Credit from their Service Tax Credit Register to CENVAT Credit Register under Rule 11 of Cenvat Credit Rules, 2004, of the balance as on 31.12.2004 under intimation to Revenue by letter dated 19.01.2005? - time limitation - Held that - transfer of credit from Service Tax credit Register to CENVAT Credit Register, was properly done under intimation to Revenue and as such the demand for this is hit by limitation. CENVAT credit - GTA service - whether the appellant have rightly utilized CENVAT Credit for payment of GTA on reverse charge basis? - Held that - utilization of CENVAT Credit for the purpose of payment of service tax on the GTA services is concerned, the appellant is covered by the ruling of Hon ble Delhi High Court in the case of CST vs. Hero Honda Motors Ltd. 2012 (12) TMI 734 - DELHI HIGH COURT , where it was held that there is no legal bar to the utilisation of Cenvat credit for the purpose of payment of service tax on the GTA services. Penalties imposed under Rule 15 of Cenvat Credit Rules, 2004 (Rule 13 of the Cenvat Credit Rules, 2002) read with Rule 25 of Central Excise Rules, 2002, read with Section 11AC of Central Excise Act, 1944 are set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Transfer of CENVAT Credit from Service Tax Credit Register to CENVAT Credit Register under Rule 11 of Cenvat Credit Rules, 2004, and the limitation period.
2. Utilization of CENVAT Credit for payment of GTA service on reverse charge basis.

Analysis:

Issue 1 - Transfer of CENVAT Credit:
The appeal dealt with the transfer of CENVAT Credit from the Service Tax Credit Register to the CENVAT Credit Register under Rule 11 of the Cenvat Credit Rules, 2004. The appellant had intimated the Revenue about the transfer by a letter dated 19.01.2005. The appellant argued that the transfer was time-barred as they had informed the Asst. Commissioner of Central Excise about the transfer pursuant to the new Cenvat Credit Rules, 2004. The appellant provided details of the credits transferred. The Tribunal found that the transfer was properly done under intimation to Revenue and hence the demand for the same was hit by limitation.

Issue 2 - Utilization of CENVAT Credit for GTA service:
Another aspect of the case involved the utilization of CENVAT Credit for payment of GTA service on a reverse charge basis. The appellant contended that this issue was covered by the decision of the Hon'ble Delhi High Court in a specific case. The appellant cited relevant provisions of the Cenvat Credit Rules, 2004, and the Service Tax Act, 1994, to support their argument. The Tribunal agreed with the appellant, citing the Delhi High Court's ruling and set aside the service tax demand related to the utilization of CENVAT Credit for GTA services.

In conclusion, the Tribunal set aside the service tax demands related to both the transfer of CENVAT Credit and the utilization of CENVAT Credit for GTA services. Additionally, the penalties imposed under the relevant rules were also set aside. The Tribunal's decision was based on the proper transfer of credit and the applicability of the Delhi High Court's ruling in the case of utilization of CENVAT Credit for GTA services.