Tribunal allows appeal on service tax payment method, upholding CENVAT Credit adjustment.

The Tribunal allowed the appellant's appeal in an appeal against an Order-in-Appeal regarding payment of service tax by adjusting CENVAT Credit instead of cash. The Tribunal held that the appellant's method of payment was justified under the law, rejecting the Revenue's appeal and upholding the appellant's position based on previous decisions.

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Issues involved: Appeal against Order-in-Appeal regarding payment of service tax by adjusting CENVAT Credit instead of cash.

Analysis:

Issue 1: Payment of service tax by adjusting CENVAT Credit
The appellant received goods from a goods transport agency and paid the tax under Rule 2(1)(d)(v) of the Service Tax Rules, 1994 by debiting the CENVAT Credit amount. The department demanded cash payment instead of adjusting the credit. The Tribunal referred to a similar case where it was held that the recipient of services from the goods transport agency is liable to pay service tax and is considered a provider of taxable service under Rule 2(r), falling under the definition of output service in Rule 2(p). The Tribunal noted that the deletion of an explanation from Rule 2(p) would not affect this liability. The Tribunal also distinguished a Single Member decision from a Division Bench judgment, ultimately rejecting the Revenue's appeal and allowing the appellant's appeal based on previous decisions.

Conclusion:
The Tribunal set aside the impugned order and allowed the appeal, maintaining that the appellant's payment of service tax by adjusting CENVAT Credit was justified under the law.

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