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TMI Blog2011 (6) TMI 898X X X X Extracts X X X X X X X X Extracts X X X X ..... ority. 3. The respondent is engaged in the manufacture of Moulded Plastic articles such as Furniture, Crates falling under Heading 94.01 and 39.23 respectively. The respondent paid service tax on transport of inputs (GTA service), through Cenvat credit. Proceedings were initiated against them on the ground that they wrongly debited service tax to Cenvat Credit amounting to Rs. 80,492/- instead of paying through PLA. Accordingly recovery of Rs. 80,492/- was ordered and penalty of equal amount under Rule 15(2) of Cenvat Credit Rules, 2004 and penalty of Rs. 3,000/- under Rule 15(3) of Cenvat Credit Rules, 2004 and penalty of Rs. 4,000/- under Rule 25(1)(a)/25(1)(d) of Central Excise Rules, 2002 were imposed. The respondent challenged th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... objection regarding jurisdiction on the ground that since the case pertains to the period prior to the appellant opting for LTU, the same would fall under the jurisdictional Tribunal in view of the Board's Circular dated 10-6-2010. The ld. SDR countered the said submission that the circular does not relate to appeal to be filed with the Tribunal, in support he has also placed reliance on Board's Circular No. 834/11/2006-CX, dated 5-10-2006 which provides that "all show cause notices pending adjudication, as on the date of issue of acceptance letter will be transferred to the LTU along with all connected case papers. Cases that are in the process of being adjudicated (i.e. where personal hearings have been conducted) will be decided by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... final products, the service for which he is liable to pay service tax shall be deemed to be the output service." 7.1 By Notification No. 8/2006-S.T. (N.T.), dated 19-4-2006, Rule 2(p) of Cenvat Credit Rules, 2004 was amended by deleting the above mentioned Explanation. Subsequently, with effect from 1-3-2008, by Notification No. 10/2008-S.T. (N.T.), dated 1-3-2008, Rule 2(p) was further amended so as to exclude the GTA service covered by Section 65(105)(zzp) of the Finance Act, 1994 from the purview of "output service". The amended Rule 2(p) in force with effect from 1-3-2008 is as under : "Rule 2(p) - "output service" means any taxable service excluding the taxable service referred to in sub-clause (zzp) of clause (105) of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead with Rule 2(1)(d) of Service Tax Rules, 1994 - (a) Those who provide a taxable service/services or manufacture dutiable final products or provide taxable service/services as well as manufacture dutiable final products. (b) Those who do not provide any taxable service or manufacture any dutiable final products - the category to which the appellant belong. 8.1 During period prior to 19-4-2006 by virtue of the legal fiction of explanation to Rule 2(p), for a person falling in category (b) above, who is liable to pay service tax as service recipient in respect of some taxable service received by him, the service received by him shall be deemed to be his output service. Since this le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, 1994, is deemed to be their "output service", they could not take service tax credit in respect of other taxable services received or input duty credit in respect of duty paid goods received, as they are not manufacturing any dutiable final product or providing any taxable service. In terms of provisions of Rule 3(1) of the Cenvat credit Rules, 2004, credit of service tax paid on "input services" received and/or of Central Excise duty paid on inputs/capital goods received can be taken only if the input services received and inputs and capital goods received are used in or in relation to manufacture of final products or providing of taxable output services. For the persons of category (b), in respect of their deemed output "service", whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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