2015 (8) TMI 903 - AT - Service Tax

Appellate tribunal rules in favor of appellant on Cenvat Credit and service tax issues.

The appellate tribunal allowed the appeal filed by the appellant, ruling in favor of the appellant on both accounts. The admissibility of Cenvat Credit on ... Admissibility of Cenvat Credit - freight services and GTA services- Held that:- Regarding the issue of admissibility of Cenvat Credit it has been held by Gujarat High Court in the case of Commissioner vs. Dynamic Industries Limited (2014 (8) TMI 713 - GUJARAT HIGH COURT) that point of export is the place of removal in case of exported goods. Reliance placed by the Learned (AR) in the case of M/s Market Systems vs. CCE and ST, Vadodara-II (2014 (6) TMI 33 - CESTAT AHMEDABAD) is not of any help to the Revenue as the same was passed by this bench when the benefit of law laid down by Gujarat High Court in the case of Commissioner vs. Dynamic Industries Limited (Supra) was not available. - Decided in favour of assessee. Issues Involved:Admissibility of Cenvat Credit on freight services from factory to port of export and debiting of service tax of GTA services under reverse charge mechanism.Analysis:Issue 1: Admissibility of Cenvat Credit on freight servicesThe appellant contested the disallowance of Cenvat Credit amounting to Rs. 3,56,608, arguing that the credit for freight services from the factory to the port of export should be admissible. The advocate for the appellant relied on the case laws of Modern Petro Film vs. CCE, Vadodara and Commissioner vs. Dynamic Industries Limited to support their argument. The Revenue, represented by Shri Govind Jha, defended the order passed by the first appellate authority, citing the case law of M/s Market Systems vs. CCE and ST, Vadodara-II. The judgment referred to the decision of the Gujarat High Court in Commissioner vs. Dynamic Industries Limited, emphasizing that the point of export is considered the place of removal for exported goods. The bench dismissed the reliance placed by the Revenue on the case of M/s Market Systems vs. CCE and ST, Vadodara-II, as it was passed before the benefit of the law laid down by the Gujarat High Court in Commissioner vs. Dynamic Industries Limited was available. Consequently, the appeal was allowed in favor of the appellant on this issue.Issue 2: Debiting of service tax of GTA servicesThe appellant was also facing a demand for service tax of Rs. 2,74,629 on GTA services, which was debited from the Cenvat Credit Account. The advocate for the appellant argued that the debit of GTA service tax was correctly paid from the Cenvat Credit account, citing the case law of CCE & Cus. vs. Panchmahal Steel Limited. The Revenue stood by the order passed by the first appellate authority, referring to the case law of M/s Market Systems vs. CCE and ST, Vadodara-II. The judgment highlighted the decision of the Hon'ble Gujarat High Court in the case of Commissioner of Central Excise & ST vs. Panchmahal Steel Limited, which held that the appellant could utilize Cenvat credit for paying the service tax on GTA services. Based on this legal position, the bench dismissed the appeal and ruled in favor of the appellant on this issue as well.In conclusion, the appellate tribunal allowed the appeal filed by the appellant on both accounts, emphasizing the admissibility of Cenvat Credit on freight services and the utilization of credit for paying service tax on GTA services, in line with the established legal principles and case laws cited during the proceedings.