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TMI Blog2013 (8) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... following substantial questions of law:- (1) Whether the learned Tribunal is correct in disregarding the Board Circular No. 345/4/2005 TRU dated 3.10.2005 while deciding the appeal when it has been held by Apex Court and other High Courts that the interpretation of the Central Board of Excise and Customs will be binding upon the Revenue? (2) Whether the Tribunal is right in holding that the respondents did not provide any taxable service though they did manufacture an excisable product? But for the above explanation, the GTA service so received by the respondents would have been covered under the definition of "input service" under Rule 2(1) of Cenvat Credit Rules. By virtue of the explanation, it shall be deemed to be "output service" ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as contrary to law. Consequently, the order denying the CENVAT Credit as available for payment of the service tax was held as bad in law. The first Appellate Authority pointed out that going by Section 68(2) of Chapter V of Finance Act, 1994, the recipient of GTA services was also treated as deemed provider of services. Thus, there could no dispute that the assessee was liable to pay service tax from 1.1.2005 to 30.9.2005. The Commissioner pointed out that as far as the quantum of service tax liability was concerned, there was no dispute. The Adjudicating Authority denied the facility utlising CENVAT Credit on the simple ground that the activity of the assessee would fall under Rule 2(p) of CENVAT Credit Rules, 2004. Referring to CENVAT Cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Board accepting the contention of the assessee, thereby, set aside the order of the Revenue rejecting the adjustment thereon. Aggrieved by the same, the Revenue is on appeal before us. 5. Learned standing counsel appearing for the Revenue submitted that the view of the Tribunal based on the Explanation to Rule 2(p) of the CENVAT Credit Rules, is totally unsustainable in the context of the circular issued by the Central Board explaining the provisions thereon on using CENVAT Credit towards service tax liability. Learned Standing Counsel further pointed out that the case of NAHAR INDUSTRIAL ENTERPRISES LIMITED reported in 2007-TIOL 555- CESTAT DELHI, relied on by the Tribunal, was appealed by the Revenue before the Punjab and Haryana Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appeals and in the context of the provisions of CENVAT Credit Rules, the question of the assessee adjusting the liability of service tax as against the CENVAT credit would not be a justifiable one. We disagree with the line of reasoning put forth by the Revenue. 7. As already seen in the preceding paragraph, under Section 68 of the Finance Act, 1994, every person providing taxable service to any person shall pay service tax at the rate specified in Section 68 in such manner and within such period as may be prescribed. Sub Section (2) of Section 68 however states that in respect of any taxable service notified by the Central Government in the Official Gazette, the service tax thereon shall be paid by such person and in such manner as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products from the place of removal, and includes services used in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry and security, inward transportation of inputs or capital goods and outward trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 62(2) of the Finance Act, 1994 shall be deemed as "output service". Thus, while Rule 2(l) and 2(p) cover two classes of persons, the recipient of GTA services, by virtue of the Explanation to Rule 2(p) of the CENVAT Credit Rules, as a provider of output service, is entitled to all benefits that a person providing input service would be entitled to in the matter of CENVAT credit adjustment. Thus, a reading of Rules 2(l) and 2(b) would show that they cover two different situations and though their operations are totally different, yet, for the purpose of giving credit to the service tax payable from the CENVAT Credit available, the recipient is also entitled to the same relief as a provider of the service. Thus, we do not find any error in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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