Tribunal grants waiver for service tax liability on goods transport agency; applicant eligible for credit.

The Tribunal granted waiver of pre-deposit of duty and penalty for the discharge of service tax liability on goods transport agency through Cenvat Credit account. The applicant was deemed eligible for credit before 19-4-2006, as per a Tribunal decision. However, post this date, an amendment excluded the applicant from utilizing credit, leading to the waiver being granted until the appeal's disposal. The Tribunal considered the 2008 notification introducing restrictions on credit use for certain taxable services, supporting the applicant's case for the waiver.

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Issues involved:
1. Discharge of liability of service tax on goods transport agency under Section 68(2) of the Finance Act, 1994 through Cenvat Credit account.

Analysis:
The applicant sought waiver of pre-deposit of duty and penalty related to the discharge of service tax liability on goods transport agency under Section 68(2) of the Finance Act, 1994 through Cenvat Credit account. The Commissioner (Appeals) had allowed credit before 19-4-2006 based on a Tribunal decision in a previous case. However, it was noted that an explanation to Rule 2(p) of the Cenvat Credit Rules, 2004 was omitted by Notification No. 8/2006-C.E. (N.T.) on 19-4-2006, rendering the applicant ineligible for credit post that date.

The Tribunal, in a previous case, had held that there was no restriction on utilizing credit by a manufacturing unit for payment of service tax as a service tax provider. The advocate pointed out that Notification No. 10/2008-C.E. (N.T.) dated 1-3-2008 had amended Rule 2 of the Cenvat Credit Rules, 2004, introducing restrictions on utilizing credit specifically excluding certain taxable services. This implied that the restriction for utilizing Cenvat credit towards goods transport agency services would be imposed by the 2008 notification.

Considering the above amendment and the argument presented by the applicant, it was concluded that a prima facie case existed for the waiver of pre-deposit of duty and penalty. Consequently, the pre-deposit of duty and penalty were waived until the appeal's disposal, and the stay petition was allowed. The operative part of the order was pronounced in the open court.

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