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of <h1>Tribunal grants waiver for service tax liability on goods transport agency; applicant eligible for credit.</h1> <h3>GODREJ & BOYCE MFG. CO. LTD. Versus COMMISSIONER OF C. EX., GHAZIABAD</h3> 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 ... Cenvat Credit of Service Tax utilized to discharging of liability of service tax on goods transport agency - Commissioner (Appeals) allowed credit prior to 19-4-2006 - It has observed that the explanation to Rule 2(p) of the Cenvat Credit Rules, 2004 was omitted by Notification No. 8/2006-C.E. (N.T.), dated 19-4-2006 and therefore, the applicant is not eligible to avail credit after 19-4-2006 - Notification No.10/2008-C.E. (N.T.), dated 1-3-2008 amends Rule 2 of Cenvat Credit Rules, 2004 whereby the words “any taxable service provided by the provider of taxable service” would be substituted by the words “any taxable service excluding the taxable service referred to in sub-clause (zzp) of clause (105) of Section 65 of the Finance Act, provided by the provider of taxable service.” - In view of the above amendment, it appears that the restriction for utilisation of Cenvat credit by the manufacturing unit towards GTA service would be imposed by Notification dated 1-3-2008. So, the applicant made out a prima facie case for waiver of pre-deposit of duty and penalty – stay granted 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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