2014 (4) TMI 765 - AT - Central Excise

Appellant liable for Service Tax on GTA services, penalty upheld on appeal. Assessment directed under Section 4A.

The judgment confirmed a Service Tax liability of Rs.1,42,019 against the appellant for the period from 1.1.05 to 31.3.07 for GTA services. The ... CENVAT Credit - GTA Service - Held that:- demand within the limitation period, learned advocate submits that he is entitled to take the credit of the same. However, I find that appellants final product are assessable to duty under Section 4A of Central Excise Act, in which case, they will not be entitled to credit of service tax paid on outward transportation of the goods in terms of law declared by the Tribunal in the case of Ultratech Cement [2012 (12) TMI 941 - CESTAT NEW DELHI]. As it is not clear as to whether the said disputed services were inward or outward transportation, I direct the lower authorities to adjudge on the appellants liability to the credit of Service Tax so paid after verifying the above factual fact. If the appellants are entitled to the Cenvat credit of duty on inward transportation, demand to that extent can be neutralized - Decided in favour of assessee. Issues involved:1. Confirmation of Service Tax against the appellant for a specific period.2. Dispute over the payment of Service Tax on GTA services.3. Imposition of penalty under Section 78 of the Finance Act, 1994.4. Applicability of limitation period on the demand.5. Entitlement to credit of Service Tax paid within the limitation period.6. Assessment of duty liability under Section 4A of Central Excise Act.Detailed Analysis:1. The judgment confirms the Service Tax liability of Rs.1,42,019/- against the appellant for the period from 1.1.05 to 31.3.07. The appellant allegedly received GTA services for transportation but failed to discharge their Service Tax responsibility as recipients of such services.2. The appellant claimed they were paying Service Tax to the transporters, who were depositing it with the Revenue. However, the lower authorities rejected this claim due to the lack of documentary evidence. The original adjudicating authority did not impose a penalty under Section 78, which was appealed by the Revenue. The Commissioner (Appeals) upheld the decision by extending the benefit of section 80 of the Finance Act, 1994.3. The appellant argued that the absence of a penalty under section 78 indicated no suppression on their part, limiting the availability of the longer period of limitation. They contended that most of the demand fell outside the limitation period, except for a small amount. They relied on a Tribunal decision in support of their position.4. The Revenue countered, stating that as recipients of GTA services, the appellant was liable for the Service Tax. They argued that the lack of documentary evidence regarding the payment by transporters allowed for the longer limitation period. The Revenue prayed for the dismissal of the appeal.5. The judgment held that the demand beyond the limitation period was not sustainable, while for the demand within the limitation period, the appellant could take credit. However, the appellant's final products being assessable to duty under Section 4A of the Central Excise Act meant they could not claim credit for the service tax on outward transportation, as per a Tribunal decision.6. The judgment directed the lower authorities to determine the appellant's liability for the credit of Service Tax paid on transportation after verifying whether the services were inward or outward. If entitled to the credit, the demand could be neutralized, and penalty under section 76 would be decided accordingly. The appeal was disposed of in this manner.