Appellant permitted to pay service tax on transportation services using cenvat credit pre-Notification 10/2008-CE.

The Tribunal ruled in favor of the appellant, allowing them to pay service tax on transportation services under GTA using cenvat credit before the issuance of Notification 10/2008-CE. Previous judgments supported this decision, leading to the appeal being allowed and the revenue's claims rejected.

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Issues Involved:
Whether the appellant is eligible to pay service tax towards inward and outward transportation service under GTA through cenvat credit input service register, under Rule 3 (4) of cenvat credit Rules, 2004 in terms of explanation note to Rule 2 (p) of Cenvat Credit Rules, 2004.

Analysis:
The Adjudicating Authority disallowed the cenvat credit of Rs. 93,829/- along with interest and imposed penalties for the month of May 2007. The Commissioner (Appeals) upheld the demand but set aside the penalty. The revenue relied on various decisions, including the case of Gimatex Industries Pvt. Ltd. Vs. CCE, Nagpur, I.T.C. Ltd. Commissioner, and Iswari Spinning Mills. However, the appellant argued that they are entitled to avail the credit before Notification No.10/2008-CE. The Tribunal in the case of Shree Rajasthan Syntex Ltd. Vs. CCE, Jaipur held that cenvat credit of service tax on GTA from cenvat a/c is permissible before the issue of Notification No.10/2008-CE. The Tribunal cited several decisions supporting this view, including the case of Commissioner of Central Excise, Nagpur v. Visaka Industries Ltd. and CCE, Chandigarh v. Nahar Industries Enterprises Ltd.

The Tribunal also referred to the decision of ITC Ltd. v. CCE, Guntur, where it was held that the appellant was not entitled to utilize the Cenvat Credit for payment of service tax on GTA services. However, the Tribunal distinguished this case from the present situation, stating that ITC Ltd. was not manufacturing any dutiable product or providing any output services, making them ineligible for Cenvat Credit. The Tribunal concluded that for the period before the issuance of Notification 10/2008-C.E., the issue was settled in favor of the appellant by previous judgments, and thus, set aside the impugned orders and allowed both appeals with consequential relief to the appellants.

In another case, the Tribunal, following the decision in the case of CCE, Indore Vs. Spendex Industries Ltd., rejected the appeal filed by the revenue. Consequently, the disallowance of cenvat credit was set aside, and the appeal filed by the appellant was allowed.

Conclusion:
The Tribunal's decision favored the appellant's eligibility to pay service tax on transportation services under GTA through cenvat credit before the issuance of Notification 10/2008-CE. The judgments cited supported this view, leading to the allowance of the appeal and the rejection of the revenue's claims.

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