TMI Blog2015 (12) TMI 1059X X X X Extracts X X X X X X X X Extracts X X X X ..... services provided from outside India and received in India. In view thereof the demand of service tax as deemed provider of BAS services as per the impugned order does not warrant any interference. The same is upheld. The impugned order to the extent of demand of service tax on account of GTA services as discussed above, is set aside. Commissioner (Appeals) has upheld the penalty imposed under Section 76 of Finance Act, observing that the appellant ought not to have paid the service tax from Cenvat credit, but should have paid in cash. The issue being interpretational and as the appellant has already discharged the service tax, we consider that imposing penalty would not be appropriate and the same is set aside in terms of section 80 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g their credit in Cenvat Credit account instead of paying the same in cash. The department entertained the view that as per Rule 5 of Taxation of Services Rules, 2006, the appellants ought to have paid the service tax in cash and they are not entitled to utilize Cenvat Credit for payment of their service tax liability. A show cause notice was issued, and after adjudication, the original authority confirmed the demand of service tax of ₹ 13,18,181/- and ₹ 5,93,232/- along with interest and also imposed equal amount of penalty. The appellants filed appeal before the Commissioner (Appeals) who vide the order impugned herein upheld the same. Being aggrieved, the appellants are before the Tribunal. 3. The issue involved in the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provided by any person from a country other than India and received by any person in India under section 66A of the Act, the recipient of such service. Rule 2(p) of Cenvat Credit Rules, 2004, prior to 1.3.2008 read as under:- Output service means any taxable service provided by provider of taxable service to a customer, client subscriber, policy holder, or any other person, as the case may be, and the expressions Provider and provided shall be construed accordingly. Rule 2(r) of Cenvat Credit Rules, 2004 defines provider of taxable service include a person liable for paying service tax. Rule 2(q) of Cenvat Credit Rules, 2004 defines - person liable for paying tax has the meaning assigned to it is clause (d) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such tax. If a person liable to pay service tax is not allowed to utilize the credit to pay service tax, then this definition would be nugatory. 8. The learned DR on the other hand, relied on Rule 5 of Taxation of Services Rules, 2006 and the CBEC, New Delhi Instruction F. No. B 1/14/4/2006 TRU dated 19.4.2006. It is argued that the appellants who are liable to pay service tax under the reverse charge mechanism on services provided from outside India have to pay the same in cash and cannot utilize the credit for discharging the liability. 9. In the impugned order Commissioner (Appeals) has observed as under: From the perusal of the provisions of Section 66 A and Rule 5 of the Taxation Services (Provided from outside India and rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rving that the appellant ought not to have paid the service tax from Cenvat credit, but should have paid in cash. The issue being interpretational and as the appellant has already discharged the service tax, we consider that imposing penalty would not be appropriate and the same is set aside in terms of section 80 of the Finance Act, 1994. We would also like to observe that though the Commissioner states that the penalty imposed under Section 70 read with Rule 7(2) is proper and upheld, no such penalty is seen imposed by the original authority. 12. In the result, the impugned order is modified to the extent of setting aside the demand in regard to service tax on GTA services and the penalties imposed. The demand of service tax on BAS is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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