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TMI Blog2012 (11) TMI 493X X X X Extracts X X X X X X X X Extracts X X X X ..... AVINDRAN, J. Represented by: For Assessee: Shri Manoj Chauhan, Chartered Accountant For Revenue: Shri K.N. Joshi, A.R. Per: M.V. Ravindran: This appeal is filed by the Revenue against Order-in-Appeal No.BC/65/ SURAT-II/2011, dt.12.04.2011. 2. Heard both sides and perused the records. 3. Revenue is aggrieved by the order of the first appellate authority on the ground that the first appellate authority has allowed the appeal filed by the respondent against Order-in-Original, wherein the Commissioner (Appeals) has held that the respondent is eligible for use of CENVAT amount for discharge of Service Tax liability on the GTA services upto 18.04.2006. 4. Ld.D.R. would draw my attention to the Order-in-Appeal and st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the Service Tax from CENVAT Credit account upto 18.04.2006 and w.e.f. 19.04.2006, they are liable to pay Service Tax on GTA service in cash. Since in view of the discussion at Para 4 above, the respondent-assessee are not covered by the provisions of the explanation to Rule 2(p) of CCR, 2004 read with Rule 3(4)(c) ibid, therefore, even if the explanation to Rule 2(p) has been omitted vide Notification No.8/2006-CE(NT), dt.19.04.2006, the Commissioner (Appeals) s conclusion at Para 4.4. of the Order-in-Appeal that I hold that the appellant was eligible for payment of Service Tax on the said services from CENVAT Credit account upto 18.04.2006. However, the appellant is not eligible for utilization of CENVAT Credit account/capital goods cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T, and in the case of CCE Vs Nahar Spinning Mills Ltd 2011-TIOL-413-HC-P H-ST, has settled the law, wherein the Hon'ble High Court has held that CENVAT Credit balance available in the manufacturer s account can be utilized for discharge of Service Tax liability on the GTA services till 18.04.2006 and produces the copies of said judgments. 6. I have considered the submissions made by both sides. The undisputed fact is that the respondent is a manufacturer of excisable goods and is availing the benefit of CENVAT Credit on the inputs as well as capital goods. The CENVAT Credit availed by the respondent is not in dispute. The only issue to be settled is regarding utilization of such credit by the respondent for discharge of Service Tax liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Cenvat credit availed by the respondents. The case of the Department is that the service tax ought to have been paid in cash and not from the Cenvat credit. A show cause notice was issued to the respondents to which reply was filed. The Adjudicating Authority confirmed the demand of service tax of Rs. 9,26,819/- and also imposed interest and penalty vide order dated 30-4-2006 (Annexure A/1). 4. The assessee filed the appeals before the Commissioner (Appeals), Customs Central Excise, who set aside the order of the Adjudicating Authority and held that services received by the respondents on which they were liable to pay service tax became Output Service for the purpose of Cenvat Credit Rules, 2004 and, therefore, service tax could be pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n any output service. 9. In the present case also, the service tax was paid out of the Cenvat credit on GTA services and, hence, the respondents were well within their right to utilize the Cenvat credit for the purpose of payment of service tax. The Commissioner (Appeals) as well as the Tribunal have rightly held that the respondents were entitled to pay the service tax from the Cenvat credit. 10. In view of the above, the question of law posed in these appeals is answered in favour of the assessee and against the revenue. We find no merit in these appeals and the same are accordingly dismissed. 8. Since the issue is now squarely settled in favour of the assessee and on perusal of the impugned order, I find that the first appellate auth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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