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M/s Prakash Industries Ltd Versus Commissioner of Central Excise, Raipur

2015 (7) TMI 430 - CESTAT NEW DELHI

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 during the relevant period) "output service means any service provided by pro .....

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re 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 service and that they prepared the said bills just for the purpose of creati .....

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on 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 Order No. ST/A/51817/2015-CU(DB) - Dated:- 14-5-2015 - G Raghuram, President An .....

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nalties. 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 charge mechanism was required to be paid in cash and also that it had irregular .....

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e 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) and that only a stamp to that effect was put on the goods transport agencies .....

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"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. Nahar Industrial Enterprises - 2012 (25) STR 129 (P&H). (ii] Panchmaha .....

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on 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 availed of Cenvat credit or the benefit of Notification No. 12/2003-ST and .....

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arge 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 subsequently and therefore the benefit of Notification No. 12/2003-ST cannot b .....

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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 provided by provider of taxable service." So GTA service became the appe .....

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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 para 14.2 of the impugned order that the appellant "intentionally prepa .....

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ms 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 requirement that the invoices of GTA service provider should contain decla .....

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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 issued by concerned Goods Transport Agencies on their letter-heads, address .....

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