2014 (6) TMI 93 - AT - Central Excise

Manufacturer wins appeal to use Cenvat credit for service tax payments

The judge allowed the appeal, granting relief to the appellant, a manufacturer and deemed output service provider of GTA services, to use Cenvat credit ... CENVAT Credit - Goods Transport Agency Service - Held that:- assessee manufacturing textile goods, and also deemed output service providers of GTA service, was entitled to utilize their Cenvat credit for payment of Service tax on GTA services - Following decision of Commissioner of Central Excise, Chandigarh Vs Nahar Industrial Enterprises Ltd. reported in [2007 (3) TMI 201 - CESTAT NEW DELHI] - Decided in favour of assessee. Issues:1. Payment of service tax on Goods Transport Agency Service from Cenvat account.2. Applicability of Cenvat credit for payment of service tax on GTA services.3. Interpretation of relevant case laws and precedents.Analysis:1. The appellant had paid service tax on Goods Transport Agency Service from the Cenvat account during a specific period. The adjudicating authority confirmed a demand for service tax along with interest, requiring payment in cash through TR-6 challan instead of using the Cenvat account for payment.2. The appellant's counsel cited a Tribunal case involving a manufacturing unit's use of Cenvat credit for paying service tax on GTA services. The Tribunal's decision, supported by the Punjab and Haryana High Court, established that manufacturing units could utilize Cenvat credit for such payments. This legal precedent was crucial in the appellant's argument.3. The Authorized Representative referenced other Tribunal decisions, but the presiding judge found the issue to be settled based on the previous Tribunal ruling. The judge emphasized that the appellant, being both a manufacturer and a deemed output service provider of GTA services, was entitled to use Cenvat credit for service tax payments in this context. Consequently, the judge allowed the appeal, granting consequential relief to the appellant based on the established legal principles.This judgment highlights the importance of legal precedents and the interpretation of relevant case laws in determining the applicability of Cenvat credit for service tax payments on Goods Transport Agency services. The decision underscores the significance of established legal principles in resolving taxation disputes and providing relief to taxpayers based on established legal interpretations.