Cenvat credit utilisation for deemed service provider liability under GTA services was held permissible.

Cenvat credit could be used to discharge Service tax payable by a recipient of Goods Transport Agency services treated as a deemed service provider under Rule 3(4) of the Cenvat Credit Rules, 2004. The Tribunal found no express prohibition in Rule 3(4) against utilising accumulated credit for that liability, and accepted that the assessee had discharged its final product duty partly through PLA and partly through Cenvat credit. The order permitting such utilisation was therefore sustained, and the Department's objection failed.

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Issues: Whether Cenvat credit could be utilised for payment of Service tax payable by the recipient of Goods Transport Agency services treated as a deemed service provider under Rule 3(4) of the Cenvat Credit Rules, 2004.

Analysis: The respondent had discharged duty liability on final products partly through PLA and partly through the Cenvat credit account. In respect of GTA services used for receipt of inputs, the respondent was treated as a deemed provider of service. The Tribunal found no specific bar in Rule 3(4) of the Cenvat Credit Rules, 2004 against using accumulated credit for payment of the Service tax payable in that capacity. On that basis, there was no reason to interfere with the order allowing such utilisation.

Conclusion: The issue was decided in favour of the respondent and against the Department; utilisation of Cenvat credit for payment of the Service tax liability as deemed service provider was held permissible.

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