9911796707
TMI Blog2011 (6) TMI 898X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner of Central Excise, Guntur [2011 (3) TMI 186 - CESTAT, BANGALORE], is squarely applicable to the present case, where it was held that - the service tax on GTA service received by them by the appellant which was not paid in cash but was paid through Cenvat credit account the same would be recoverable from them. Penalty - Held that: - the issue relating to payment of service tax on GTA service through cash was in dispute, the penalty is not sustainable and is liable to be set aside. Appeal allowed - decided partly in favor of assessee. - E/863/2009-Mum - Final Order No. A/164/2011-WZB/C-IV(SMB) - Dated:- 8-6-2011 - Shri S.K. Gaule, Member (T) Shri Manish Mohan, SDR (Authorized Representative), for the Appellant. Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able final products, he was required to pay the service tax on the GTA service received by him in cash, not through Cenvat credit. The learned SDR submitted that this issue has been decided by Delhi Bench of the Tribunal in the case of M/s. ITC Ltd. v. Commissioner of Central Excise, Guntur reported in 2011-TIOL-568-CESTAT-BANG = 2011 (23) S.T.R. 41 (Tribunal). 4. The contention of the respondent is that the issue has been referred to Larger Bench in the case of Panchmahal Steel Ltd. v. Commissioner of C. Ex Cus., Vadodara-II and that the case has not been decided so far. Therefore the learned counsel submitted that the case should be remanded to lower appellate authority. 5. In rejoinder the learned SDR submitted that Panchmahal St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Counsel is overruled. (2) The issue involved in this case is whether service tax on GTA service received can be paid through Cenvat Credit or cash. Undisputedly the respondent paid the service tax on GTA service through Cenvat credit instead of paying through cash is not in dispute. This issue has been discussed at length by Delhi Bench of Tribunal in the case of M/s. ITC Ltd. v. Commissioner of Central Excise, Guntur wherein it has been held that : 7. During the period from 10-9-2004, the date on which the Cenvat Credit Rules were notified, to 18-4-2006, the definition of the term output service is as under : Rule 2(p) - output service means any taxable service provided by the provider of taxable service, to a cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Service Tax Rules, 1994 and in terms of clause (d)(v) of Rule 2, the appellant, being a company registered under Companies Act, 1956 and recipient of the GTA services, are the persons liable for paying the service tax on the GTA service received by them. Rule 2(r) of Cenvat Credit Rules, 2004 creates a legal fiction so as to expand the scope of the term provider of taxable service , to include the persons covered by clause (d) of Rule 2(1) of the Service Tax Rules, 1994, who by virtue of being recipient of certain taxable services, are liable to pay the service tax on the same. The point of dispute is as to whether the taxable service received by a person, in respect of which the person, being the person liable for paying service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eated as their output service and service tax on the same will have to be paid by cash, not by utilizing input/capital goods duty credit or service tax credit, as Rule 3(4) of the Cenvat Credit Rules, 2004 permits utilization of Cenvat credit for payment of central excise duty on dutiable final products or payment of service tax on taxable output service. In fact, for the persons of category (a), the taxable service received by them, even if the duty liability on the same is required to be discharged by them, would be their input service, in respect of which they can avail Cenvat credit and use the same for payment of duty on their final product being manufactured by them or for paying service tax on taxable output service being provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... echnical consultancy services etc., cannot be treated as the input services for their deemed output service i.e., the GTA services received by them. Therefore, in respect of GTA service received by the appellant, there is no question of payment of service tax through Cenvat credit account and the same has to be paid in cash. 8.2 Thus during the period prior to 19-4-2006 irrespective of whether a person provided taxable service and/or manufactured dutiable final products or did not provide any taxable service or manufactured any dutiable final products, he was required to pay the service tax on the GTA service received by him in cash, not through Cenvat credit. 8. The ratio of the Delhi Bench is squarely applicable to the present cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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