Tribunal allows Cenvat Credit for Service Tax on Goods Transport Agency Services

The Tribunal ruled in favor of M/s Maharashtra Seamless Ltd., holding that service tax on Goods Transport Agency Services can be paid through the Cenvat Credit account. The initial payment through Cenvat Credit was deemed valid, and the demand for cash payment and interest on delayed payment were not warranted. The Tribunal set aside the order, allowed the appeal, granted re-credit of the service tax, and ordered a refund of the interest paid under protest.

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Issues:
Validity of payment of service tax through Cenvat Credit account for Goods Transport Agency Services, rejection of claim for re-credit, demand for interest on delayed payment of service tax.

Analysis:

Issue 1: Validity of payment through Cenvat Credit account
The appellant, M/s Maharashtra Seamless Ltd., received Goods Transport Agency Services and discharged the service tax liability through Cenvat Credit account. The department contended that the appellant could not pay the service tax through Cenvat Credit for GTA services and directed payment through cash. The appellant paid the amount through cash but did not pay the interest. A show-cause notice was issued, and the jurisdictional Assistant Commissioner directed the appellant to pay interest on delayed payment in cash. The appellant filed an appeal challenging this decision.

Issue 2: Rejection of claim for re-credit
The appellant filed a claim for re-credit of the amount debited through Cenvat Credit towards the payment of service tax on GTA services. The claim was rejected, and the Assistant Commissioner directed the appellant to pay interest on delayed payment in cash. The appellant contested this rejection in the appeal before the lower appellate authority.

Issue 3: Demand for interest on delayed payment
The appellant argued that previous decisions by the Tribunal and High Courts have upheld the payment of service tax on GTA services through Cenvat Credit account. Citing various case laws, the appellant contended that the payment made through Cenvat Credit account was valid, and therefore, the demand for payment through cash and interest on delayed payment were not warranted. The Commissioner for the Revenue conceded to this argument.

In the judgment, the Tribunal considered the case laws cited by the appellant and concluded that service tax on GTA services can indeed be discharged through the Cenvat Credit account. The initial payment made by the appellant through Cenvat Credit was deemed valid in law. Therefore, the Tribunal held that the demand for payment through cash again and the interest on delayed payment were not required under the law. As a result, the Tribunal set aside the impugned order, allowed the appeal, and granted the appellant the right to take re-credit of the service tax paid through Cenvat Credit account. Additionally, the appellant was entitled to a refund of the interest paid under protest, in accordance with the law.

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