2013 (2) TMI 511 - AT - Service Tax

Tribunal Rectifies Mistake, Rejects Appeal on Cenvat Credit Rule Interpretation

The Tribunal allowed the Revenue's application for rectification of mistake in the final order and rejected the appeal. The decision was based on the ... Eligibility to utilize cenvat credit availed for discharge of service tax paid on GTA services - period from October 2006 to March 2008 - Held that:- As decided in ABB Ltd. [2011 (3) TMI 248 - KARNATAKA HIGH COURT] prior to 01.03.08 credit of service tax would be available for discharge of service tax on the services rendered or received for GTA services. Since the entire service tax liability in this case falls within the period from October 2006 to February 2008 the judgment of the Hon ble High Court of Karnataka will squarely cover the issue in favour of the assessee. Issues:Rectification of mistake in the final order regarding the period involved in the appeal, utilization of cenvat credit for service tax liability on GTA services, interpretation of Rule 2(P) of Cenvat Credit Rules, 2004, application of the judgment of the Hon'ble High Court of Karnataka in ABB Ltd. case.Analysis:1. Rectification of Mistake in Final Order:The Revenue filed an application for rectification of mistake in the final order due to an error in indicating the period involved in the appeal. The order mentioned the period as April 2005 to September 2005, whereas the correct period was from October 2006 to March 2008. The mistake was acknowledged by both sides, and it was noted that the error might have occurred due to overlapping facts from another appeal decided on the same day. The Tribunal recalled the final order and restored the appeal and cross objection to their original number for further consideration.2. Utilization of Cenvat Credit for Service Tax Liability on GTA Services:The main issue in the case was whether the assessee could utilize the cenvat credit availed for the discharge of service tax on GTA services for the period from October 2006 to March 2008. The Commissioner had allowed the utilization of cenvat credit for service tax up to March 2008, which was challenged by the Revenue. The Tribunal referred to Rule 2(P) of the Cenvat Credit Rules, 2004, which was amended in April 2006. The judgment of the Hon'ble High Court of Karnataka in the ABB Ltd. case clarified that prior to March 2008, credit of service tax could be used for GTA services. As the entire service tax liability fell within the period up to February 2008, the Tribunal ruled in favor of the assessee, allowing the application for rectification of mistake by the Revenue and rejecting the appeal.3. Application of the Judgment of the Hon'ble High Court of Karnataka:The Tribunal relied on the judgment of the Hon'ble High Court of Karnataka in the ABB Ltd. case to settle the issue regarding the utilization of cenvat credit for service tax liability on GTA services. The High Court's decision supported the assessee's position that prior to March 2008, the cenvat credit could be used for service tax on GTA services. Since the service tax liability in this case was within the relevant period, the Tribunal concluded that the High Court's judgment favored the assessee, leading to the rejection of the Revenue's appeal and the disposal of the cross objection.In conclusion, the Tribunal allowed the application for rectification of mistake by the Revenue and rejected the appeal, citing the applicability of the Hon'ble High Court of Karnataka's judgment in the ABB Ltd. case in favor of the assessee regarding the utilization of cenvat credit for service tax liability on GTA services.