2017 (5) TMI 152 - AT - Service Tax

Tribunal upholds Service Tax demand, sets aside penalty in Cenvat Credit case

M/s. Tata Steel Ltd. (Sukinda Chromite Mines) Versus Commr. of C. Ex., Customs & Service Tax, BBSR-I

M/s. Tata Steel Ltd. (Sukinda Chromite Mines) Versus Commr. of C. Ex., Customs & Service Tax, BBSR-I - TMI Issues: Applicability of Cenvat Credit on GTA service for Chrome Concentrate export, confirmation of Service Tax demand, imposition of penalty, interpretation of legal provisions regarding payment of Service Tax through Cenvat Credit.Analysis:The case involved the dispute of whether the appellant, engaged in Chrome Concentrate production and export, could utilize Cenvat Credit for GTA service. The Revenue contended that Cenvat Credit on GTA service was not permissible. The Adjudicating authority upheld the demand of Service Tax, interest, and penalty, which was affirmed by the Commissioner (Appeal).The appellant relied on various Tribunal decisions in their favor, arguing that they were entitled to utilize Cenvat Credit for GTA service. However, the Revenue cited a recent Tribunal decision stating that Service Tax on GTA service had to be paid in cash before 19-04-2006, not through Cenvat Credit. The decision clarified the distinction between persons liable for Service Tax as service recipients based on their activities.The Tribunal noted that during the period in question (January 2005 to August 2005), the demand for Service Tax with interest was justified due to the nature of the GTA service received by the appellant. However, the imposition of penalty was deemed unwarranted. Consequently, the impugned order was modified to uphold the demand for Service Tax with interest while setting aside the penalty.In conclusion, the appeal by the appellant was disposed of with the modification in the order, emphasizing the requirement to pay Service Tax on GTA service in cash during the specified period, as per the legal interpretation provided in the case analysis.