Tribunal Grants Waiver & Stay on Service Tax Recovery for GTA Services

The Tribunal granted the waiver of pre-deposit and stayed the recovery of the demanded amount for service tax under the GTA service category. The decision was based on the utilization of Cenvat credit for discharging the tax liability and precedent set by previous decisions involving the same assessee.

---

---

Issues:
Waiver of pre-deposit of service tax amount and penalty imposed under sections 76, 77, and 78 of the Finance Act, 1994 for GTA service.

Analysis:
The application filed sought the waiver of pre-deposit of an amount of Rs. 79,665 demanded for service tax under the category of GTA service for outward transportation of materials. The appellants argued that the impugned services were part of the works contract activity, citing the case of Daelim Industrial Co. Ltd. v. CCE. They contended that the outward transportation activity cannot be separated for service tax and that the tax liability was discharged using Cenvat credit.

The Judicial Member noted that the correctness of the ratio in the Daelim Industrial Co. Ltd. case was doubted and referred to the President, CESTAT for a Larger Bench. The Departmental Representative argued that the impugned activity was not an 'output service' during the relevant period and that Cenvat credit could not have been used to discharge the liability. It was contended that the impugned order was valid and should be sustained.

After considering both sides, the Technical Member observed that the tax liability had indeed been discharged using Cenvat credit. It was highlighted that an assessee could make a pre-deposit for an appeal using Cenvat credit. Referring to a previous Stay Order, the Technical Member ordered the waiver of pre-deposit and the stay of recovery of the adjudged dues pending the appeal's decision. This decision was based on the precedent set by a Division Bench of the Tribunal in a similar case involving the same assessee for an earlier period.

In conclusion, the Tribunal granted the waiver of pre-deposit and stayed the recovery of the demanded amount, considering the utilization of Cenvat credit and the precedent set by previous decisions involving the same assessee.

---