Tribunal allows appeal on TR-6 challans for Cenvat credit, precedent cases and rule amendment support decision.

The Tribunal allowed the appeal filed by M/s. Indofil Chemicals Company regarding the denial of Cenvat credit based on TR-6 challans. It held that the appellant had discharged the service tax liability using TR-6 challans, which were considered an approved document for tax payment. The Tribunal found that precedent cases supported the appellant's position, and the rule was later amended to include TR-6 challans as acceptable documents for Cenvat credit. As a result, the appeal was allowed, and the impugned order denying the credit was set aside.

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Issues involved:
The issue involves the denial of Cenvat credit on the strength of TR-6 challans prior to a specified date.

Summary:

Issue 1: Denial of Cenvat credit based on TR-6 challans:
The appellant, M/s. Indofil Chemicals Company, received GTA services and discharged the service tax liability through TR-6 challans. The department contended that as TR-6 challans were not specified as a document under Rule 9 of the Cenvat Credit Rules, 2004 before a certain date, the appellant should not have taken the credit based on such challans. A notice was issued proposing to deny the credit, which was adjudicated by imposing a penalty and interest. The appellant appealed against this decision.

Details:
The appellant argued that the liability to discharge service tax was on them as the recipient of GTA services, and they had paid the tax through TR-6 challans, the only document indicating payment of service tax. They cited precedent cases where Cenvat credit on service tax paid via TR-6 challans was deemed permissible even before the specified date. The appellant sought allowance of the appeal based on these grounds.

Decision:
The Tribunal considered that the appellant had discharged the service tax liability using TR-6 challans, an approved document for tax payment. As long as Cenvat credit was available on GTA services, the appellant was entitled to take credit based on duty paying documents like TR-6 challans. Precedent decisions supported this approach, and the rule itself was later amended to include TR-6 challans as acceptable documents for Cenvat credit. Consequently, the appeal was allowed, and the impugned order was set aside, along with the disposal of the stay petition.

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