2012 (11) TMI 43 - AT - Service Tax

Appellate Tribunal decision on CENVAT credit for service tax paid on GTA, tyre retreading, and shifting household articles

The Appellate Tribunal ruled on the eligibility of CENVAT credit for service tax paid on GTA service, tyre retreading service, and shifting of household ... CENVAT credit admissibility - CENVAT credit in respect of goods transport agency services - CENVAT credit for shifting of household goods of employees - vehicle maintenance as an input service - CENVAT credit for tyre retreading - reliance on binding judicial precedentCENVAT credit admissibility - CENVAT credit in respect of goods transport agency services - reliance on binding judicial precedent - Admissibility of CENVAT credit of service tax paid on GTA services received by the assessee - HELD THAT: - The Tribunal applied the decision of the Hon'ble High Court of Karnataka in CCE & ST v. ABB Ltd. and held that the question of entitlement to CENVAT credit for GTA services is governed by that precedent. In view of the applicable judicial precedent, the Revenue's appeal contesting allowance of credit in respect of GTA services was rejected.Revenue's appeal rejected; CENVAT credit for GTA services allowed to the assessee in accordance with the cited precedent.CENVAT credit for shifting of household goods of employees - CENVAT credit admissibility - Availability of CENVAT credit of service tax paid on shifting of household goods of employees - HELD THAT: - The Tribunal noted that in the assessee's earlier decision the Tribunal had taken a view that CENVAT credit of service tax paid for shifting of household goods of employees is not admissible. As the issue was covered against the assessee by that earlier Tribunal decision and no contrary ground was successfully argued, the demand for service tax credit taken on this service was upheld. The Tribunal further recorded that the penalty had been set aside by the Commissioner (Appeals) and that no challenge to that order was before it.Demand for service tax in respect of shifting of household goods of employees upheld; assessee liable to repay the CENVAT credit availed on this service with interest; penalty not retrievable before the Tribunal.Vehicle maintenance as an input service - CENVAT credit for tyre retreading - Whether service tax paid on tyre retreading is admissible as CENVAT credit as part of vehicle maintenance - HELD THAT: - The Tribunal accepted the assessee's submission that tyre retreading constitutes maintenance of vehicles and is therefore an input service. It observed that in the assessee's own earlier decision the Tribunal had held that credit for vehicle maintenance is available. The Revenue's contention that tyre retreading cannot be characterized as vehicle maintenance, including that retreading was not performed by an authorized service station, was not sustained.CENVAT credit of service tax paid on tyre retreading allowed as part of vehicle maintenance.Final Conclusion: The appeals were disposed of by allowing CENVAT credit for GTA services (following the High Court precedent) and for tyre retreading (as vehicle maintenance), while upholding the demand for service tax credit availed on shifting of household goods of employees; penalty issues were not reopened before the Tribunal. Issues:Eligibility of CENVAT credit for service tax paid on GTA service, tyre retreading service, and shifting of household articles of employees.Analysis:The issue before the Appellate Tribunal was the eligibility of CENVAT credit for service tax paid on GTA service, tyre retreading service, and shifting of household articles of employees. The Revenue appealed against a decision allowing the credit for GTA services, while the assessee appealed against the disallowance of credit for service tax paid on transportation of household articles of employees and tyre retreading.The learned counsel for the assessee referred to a previous decision by the Tribunal in Hindustan Coca Cola Beverages (P.) Ltd. v. CCE&ST, where it was held that CENVAT credit for service tax paid for shifting household goods of employees is not admissible. The counsel did not contest this issue. However, regarding tyre retreading service, it was argued that vehicle maintenance is an 'input service,' and therefore, the credit for service tax paid on tyre retreading should be allowed as it is part of vehicle maintenance.On the other hand, the Revenue's representative cited a decision by the Hon'ble High Court of Karnataka in the case of CCE & ST v. ABB Ltd., and did not contest the credit taken before 01.04.2008. Regarding tyre retreading, it was argued that it cannot be considered as maintenance of vehicles since it is not done by an authorized service station.The Tribunal considered both arguments and held that the benefit of credit for GTA service was settled by the decision of the Hon'ble High Court of Karnataka in the case of ABB Ltd., thus rejecting the Revenue's appeal. As for the service tax paid for shifting household goods of employees, the Tribunal upheld the demand since it was covered against the assessee in a previous decision. However, regarding tyre retreading service, the Tribunal considered it as part of vehicle maintenance and allowed the benefit of service tax credit, as previously decided in the Tribunal's own case.In conclusion, the demand for service tax on shifting household goods of employees was upheld against the appellants, who were held liable to pay the service tax credit availed on this service with interest. The penalty was set aside by the Commissioner (Appeals), and since there was no challenge to this decision in the Revenue's appeal, the question of penalty did not arise. Both appeals were declared accordingly.