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2015 (10) TMI 2465 - KARNATAKA HIGH COURT

2015 (10) TMI 2465 - KARNATAKA HIGH COURT - 2015 (40) S.T.R. 1063 (Kar.) - Utilisation of CENVAT Credit - GTA Service - Revenue contends that credit taken by assessee and reutilising it for payment of service tax is not tenable and as per Rule 3(4)(e) of Cenvat Credit Rules, 2004, Credit may be utilized for payment of service tax on any output services - Held That:- There is no ground to disagree with judgement and reasoning of Punjab and Haryana High Court in Nahar Industries Enterprises Ltd.[2 .....

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ing that the issue stands covered by two judgments, of the Punjab and Haryana High Court as well as the Delhi High Court in the cases of Commissioner of Central Excise, Chandigarh vs. Nahar Industrial Enterprises Limited, 2012 (25) STR 129 and in the case of Commissioner of Service Tax vs. M/s. Hero Honda Motors Limited, 2013 (29) STR 358 (Delhi), respectively. 3. The brief facts are, that the respondent assessee M/ s.Godavari Sugar Mills Limited, Bagalkot , are said to be manufacturers of excis .....

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scharging service tax liability. It was opined that the act of the assessee of taking credit of service tax paid on GTA services and reutilizing the same for payment of service tax on GTA services is not tenable. Accordingly a show cause notice was issued demanding service tax of ₹ 15,36,051/- and demanding recovery of Cenvat Credit of ₹ 22,31,610/- along with interest and it was also proposed to impose penalty under Section 76 of the Finance Act, 1994 read with Rule 15(3) of Cenvat .....

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005 and on an interpretation of Rule 2(p) and 2(r) as the said Rules stood prior to 19.4.2006, had set aside the Order-in-Original. Aggrieved by the order, the revenue had preferred an appeal before the Customs, Excise and Service Tax Appellate Tribunal, Bengaluru. The Tribunal placing reliance on the aforesaid decisions of the Punjab and Haryana High Court and the Delhi High Court, held that the assessee can utilize the Cenvat Credit for payment of duty on GTA services and rejected the appellan .....

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ll as the Delhi High Court have relied on the CBEC's Excise Manual of Supplementary Instructions which do not indicate any legal bar for the utilization of Cenvat Credit for the purpose of payment of service tax on the GTA services. Apart from the above as per Rule 3(4)(e) of the Cenvat Credit Rules, 2004, the Cenvat Credit may be utilized for payment of service tax on any output services and Rule 3(4) of the Cenvat Credit Rules, 2004, read with Section 68 of the Finance Act, 1994, particula .....

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