2015 (9) TMI 1089 - AT - Service Tax

Tribunal decision: Cenvat credit allowed for network services, GTA payment upheld

The Tribunal dismissed the Revenue's appeals regarding the disallowance of cenvat credit for network services and the permissibility of cenvat credit for ... Disallowance of CENVAT Credit - Network services - Nexus with output service provided - whether the service tax paid on net work service availed by the appellant for its computer net work to provide input service for generation of output service of management, and repair of heavy machinery, shall entitle the assessee to the cenvat credit of that tax - held that:- The network services availed by the appellant to make its own mail/server functional having its integral connection to generate the output service is a tool for such output service. GTA service - Held that:- In absence of any contrary evidence as to the deposit of that amount of service tax by the GTA service provider, learned Commissioner (Appeals) has reached to a proper conclusion for which the Revenue's appeal on this count is dismissed. - Decided in favour of assessee. Issues:1. Disallowance of cenvat credit for network services2. Permissibility of cenvat credit for GTA services3. Discrepancy in payment responsibility for GTA service taxAnalysis:1. The appeal concerns the disallowance of cenvat credit amounting to Rs. 2,51,666 for network services utilized by the appellant. The appellant argued that the network services had a direct nexus with the output services provided, as they were used in the management, maintenance, and repair of heavy engineering machinery. The Tribunal agreed that the network services were integral for generating output services and thus allowed the cenvat credit, dismissing the Revenue's appeal against the relief granted.2. The second issue pertains to the permissibility of cenvat credit for GTA services. The Revenue contended that the service tax paid for GTA services was not eligible for cenvat credit. However, it was found that the appellant had discharged Rs. 6,09,756 towards service tax on GTA services as per show cause notice No. 50/2011. The appellant had also reversed this amount as a precautionary measure. Consequently, the Tribunal dismissed the Revenue's appeal on this issue.3. The final grievance of the Revenue concerned the allowance of credit amounting to Rs. 1,54,565 under GTA services, covered by show cause notice No. 50/2011. The Revenue argued that the appellant should have paid this amount instead of the transporter. The Commissioner (Appeals) confirmed that the transport service provider had indeed paid the service tax and that there should not be double taxation. As there was no evidence to the contrary regarding the payment of service tax by the GTA service provider, the Tribunal upheld the decision of the Commissioner (Appeals) and dismissed the Revenue's appeal on this count.In conclusion, the Tribunal dismissed both of the Revenue's appeals while allowing the appellant's appeal. The stay applications were disposed of accordingly.