Cenvat credit on GTA service tax payment required fresh adjudication where actual payment mode and proof were not examined.

Recipient-paid service tax on GTA services could support Cenvat credit, and payment through a challan or by debit entry in the PLA was treated as a valid mode of discharging the tax liability. The Tribunal held that no material distinction existed between payment through the PLA and payment through a Cenvat credit account for this purpose. However, the factual question whether tax had actually been paid in the manner claimed had not been examined at the earlier stages, and the appellate forum could not itself record evidence. The impugned order was set aside and the matter was remanded for de novo adjudication by the adjudicating authority.

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Issues: Whether the dispute regarding availment of Cenvat credit on service tax paid by a recipient of GTA service, and the mode of payment through Cenvat credit account or PLA, required de novo examination by the adjudicating authority.

Analysis: The documents prescribed under Rule 9 of the Cenvat Credit Rules did not fully address the situation where the recipient of service paid service tax. Payment through challan could support credit, and payment by debit entry in PLA was also treated as a valid mode of discharge of tax liability. No reason existed to distinguish payment through PLA from payment through Cenvat credit account, since both stood on identical footing for discharge of duty liability. However, the factual question whether tax had actually been paid in the manner asserted was not examined at the earlier stages, and the Tribunal could not itself take evidence at the appellate stage. In these circumstances, the factual and legal issues required fresh adjudication.

Conclusion: The impugned order was set aside and the matter was remanded to the adjudicating authority for de novo consideration.

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