High Court allows CENVAT credit using TR-6 challans pre-16.06.2005. Precedents support assessee's entitlement.

The High Court held in favor of the assessee, ruling that they were entitled to avail credit of service tax based on TR-6 challans before 16.06.2005. The court relied on precedents establishing TR-6 challans as acceptable documents for availing credit, even if not specifically listed at the relevant time. The decision aligned with principles emphasizing entitlement to CENVAT credit on genuine duty paid inputs. The appeals were disposed of without costs, affirming the assessee's right to the credit.

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Issues:
Whether the assessee was entitled to avail credit of service tax on the basis of TR-6 challans prior to 16.06.2005 as TR-6 challan was included as a specified document vide Notification No. 28/2005-CE(NT) dated 07.06.2005 with effect from 16.06.2005.

Analysis:

1. The assessee, engaged in the manufacture of Motor vehicles, availed inadmissible service tax credit on Goods Transport Agency Services prior to the issuance of Notification No. 28/2005-CE dated 07.06.2005. The Department contended that the credit was recoverable under Rule 14 of Cenvat Credit Rules, 2004. The Tribunal allowed the appeals filed by the assessee, leading to the Department filing the present appeals.

2. The core issue revolved around whether the assessee could avail credit of service tax based on TR-6 challans before 16.06.2005. The Tribunal's decision in the case of Commissioner of Central Excise, Goa, vs. Essel Pro-pack Ltd. held that TR-6 challan was a proper document for availing credit, even if not listed as a specified document at the relevant time. The decision was further affirmed by the Bombay High Court in Commissioner of Central Excise v. Essel Propack Ltd.

3. The Punjab & Haryana High Court's judgment in Commissioner of Central Excise, Ludhiana vs. Ralson India Ltd. supported the acceptance of duty paid inputs if their utilization in the final product was not disputed. The Department's Circular also emphasized entitlement to CENVAT credit on genuine duty paid inputs. In the present case, the authorities accepted the entitlement of the assessee to CENVAT Credit, with the only contention being the type of document required for availing such credit.

4. Ultimately, the High Court concurred with the law established in the above decisions, ruling in favor of the assessee. It held that the assessee was entitled to avail credit of service tax on the basis of TR-6 Challan. The substantial question of law was answered in favor of the assessee, and the appeals were disposed of without costs.

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