Tribunal Allows Appeal on Service Tax Credit: TR-6 Challan Valid for Credit Availment

The Tribunal allowed the appeal filed by M/s. Fibre Foils Ltd. in a case challenging the availment of service tax credit based on TR-6 challan. The Tribunal held that the TR-6 challan served as evidence of tax payment, enabling credit availment, in line with precedents like Essel Propack Ltd. and Crompton Greaves Ltd. The decision emphasized the importance of the duty paying document for credit availment and rectified a lacuna in the Rule retrospectively, making TR-6 challan a valid document. Consequently, the appeal was allowed, providing relief to the appellant.

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Issues:
Challenge to availment of service tax credit based on TR-6 challan.

Analysis:
The appeal and stay application were filed against an order passed by the Commissioner of Central Excise (Appeals), Mumbai-II. The appellant, M/s. Fibre Foils Ltd., had paid Service Tax on GTA services received and availed service tax credit based on TR-6 challan. The department contended that TR-6 challan was not a prescribed document for availing credit. The Deputy Commissioner confirmed the demand, imposed a penalty, and the lower appellate authority dismissed the appeal, leading to the current appeal.

The appellant argued that in the case of GTA service, the recipient is liable for service tax payment, and TR-6 challan serves as evidence of such payment, making it eligible for credit. The appellant cited precedents like Essel Propack Ltd. and Crompton Greaves Ltd., where TR-6 challan was considered a valid document for availing credit. The appellant sought allowance of the appeal based on these arguments.

The Revenue reiterated the lower authority's findings, opposing the appellant's contentions. The Tribunal, after considering both sides' submissions, noted that the appellant had paid service tax through TR-6 challan, which served as evidence of tax payment and enabled credit availment. The Tribunal highlighted a lacuna in the Rule before an amendment rectified it, making TR-6 challan a valid document retrospectively. Emphasizing the importance of the duty paying document for credit availment, the Tribunal aligned with the decisions in Essel Propack Ltd. and Crompton Greaves Ltd. cases, allowing the appeal and granting consequential relief.

In conclusion, the Tribunal allowed the appeal, supported by the retrospective validity of TR-6 challan as a duty paying document for service tax credit availment. The decision was in line with established precedents, providing relief to the appellant.

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