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2015 (7) TMI 430 - CESTAT NEW DELHI

2015 (7) TMI 430 - CESTAT NEW DELHI - 2015 (40) S.T.R. 804 (Tri. - Del.) - Goods Transport Agency service - availing benefit of Notification No. 32/2004-ST - Whether GTA have utilized the CENVAT Credit - Held that:- as per Rule 2(r) of Cenvat Credit Rules 2004, "provider of taxable service includes person liable for paying service tax". As the appellant was liable to pay service tax on GTA service it became provider of the said GTA service. In terms of Rule 2(p) of the said Rules (as it stood du .....

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ice for the appellant in terms of Rule 2(1) of Cenvat Credit Rules. Therefore the service tax paid by them under GTA service was available to them as Cenvat Credit. Seen in this light, the observation of the adjudicating authority in para 14.2 of the impugned order that the appellant "intentionally prepared the bills in terms of Rule 4A of the Service Tax Rules 1994 and debited the amount from the Cenvat credit account in spite of the admitted fact that they were not the provider of any output s .....

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rmed that they had not taken any Cenvat credit or the benefit of Notification No. 12/2003-ST. These GTA service providers were not even registered with the Service Tax department. - appellant had correctly availed of the benefit of Notification No. 32/2004-ST and there is no legal basis to deny the said benefit. Consequently the demand of ₹ 6,75,96,097/- under GTA service is clearly unsustainable - impugned demand is not found to be sustainable. - Appeal No. ST/425/2009-CU(DB) - Final Orde .....

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therefore disallowed and ordered to be recovered along with interest and penalties. 2. The appellant is a manufacturer of iron and steel products and recipient of Goods Transport Agency Service. It paid service tax on GTA service by utilising Cenvat credit and took the credit thereof on the basis of its own invoices issued in respect of the service tax on GTA service so paid by it. The adjudicating authority held that it was not a GTA service provider and therefore service tax under reverse char .....

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efit of Notification No. 32/2004-ST dated 3.12.2004 and thereby paid service tax on 25% of the amount paid for GTA service even when there were no declarations from the transport agencies to the effect that they (i.e. the transport agencies) had not availed of the credit of duty paid on inputs and capital goods and had also not availed of the benefit under Notification No. 12/2003-ST. The transport documents did not bear any such declaration of the service providers (goods transport agencies) an .....

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the service provider because as per Rule 2(r) of Cenvat Credit Rules, 2004 "provider of taxable service includes the person liable to service tax", and under Rule 2(p) of the said Rules, "output service means taxable service provided by the provider of taxable service". It stated that as it was deemed to be a provider of GTA service the service tax thereon was rightly paid by utilisation of Cenvat credit. It cited following judgements in support of its contention: (i) CCE Vs. .....

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e question of their availment of Cenvat credit or the benefit of Notification No. 12/2003-ST does not arise. Further, the requirement of declaration on the invoices was introduced by CBEC's executive instructions and as a matter of abundant caution it had put the rubber stamp to that effect with the consent of the goods transport agencies which had issued the invoices. It stated that it has also since taken independent declarations from the transport agencies to the effect that they had not .....

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rely because the appellant was required to pay service tax under reverse charge mechanism does not make it a provider of GTA service and therefore Cenvat credit cannot be utilised for paying service tax thereon. He further stated that the declaration regarding non-availment of Cenvat credit or the benefit of Notification No. 12/2003-ST by Goods Transport Agencies was not available on the invoices at the time of receipt of service and that the stamp to that effect was put on the invoices only sub .....

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f service also shows mis-statement on their part thus argued the ld. DR. 6. We have considered the contentions of both sides. We find that as per Rule 2(r) of Cenvat Credit Rules 2004, "provider of taxable service includes person liable for paying service tax". As the appellant was liable to pay service tax on GTA service it became provider of the said GTA service. In terms of Rule 2(p) of the said Rules (as it stood during the relevant period) "output service means any service pr .....

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ments like Commissioner of Central Excise, Salem Vs. Cheran Spinners Ltd. (supra), CCE Vs. Nahar Industrial Enterprises (supra), Panchmahal Steel Ltd. Vs. CCE, Vadodara (supra). On the other hand, it is not the case of Revenue that GTA service was not an input service for the appellant in terms of Rule 2(1) of Cenvat Credit Rules. Therefore the service tax paid by them under GTA service was available to them as Cenvat Credit. Seen in this light, the observation of the adjudicating authority in p .....

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is. Thus, the demand of ₹ 1,17,75,703/- is not sustainable. 7. In terms of Notification No. 32/2004, service tax under GTA service is payable on 25% of the gross amount subject to the condition that Cenvat credit of duty paid on inputs and capital goods used for providing such service is not taken and benefit of Notification No. 12/2003-ST is also not taken. Thus so long these conditions are satisfied the benefit of the said notification is available. The notification nowhere lays down the .....

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the appellant to do so. They have also affirmed that they had not taken any Cenvat credit or the benefit of Notification No. 12/2003-ST. These GTA service providers were not even registered with the Service Tax department. It is seen that in the case of Yash Paper Ltd. (supra), the CESTAT observed as under: "3. The assessee remitted service tax under the reverse charge mechanism, as the recipient of GTA service. Before the primary authority and at the time of personal hearing, declarations .....

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