2012 (12) TMI 734

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....essee i.e. respondent in this case was issued a show cause notice on 30.1.2006 proposing recovery of dues (including interest) and penal action in terms of Finance Act, 1994. The Revenue took action on the basis that the assessee had wrongly claimed to have paid service tax on goods transport agency under Section 68(2) of the said Finance Act, by adjustment of CENVAT credit instead of payment in cash. The Revenue's contention was that the tax liability had to be discharged by cash and not through a claim of CENVAT credit. The Revenue also contended that the assessee was not a service provider but recipient of a taxable service and that the CENVAT credit facility was only provided to a service provider but not to the recipient such as as....

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....rged in the present case. The High Court by its order reported as CCE v. Nahar Industrial Enterprises Ltd. [2012] 35 STT 391 held as follows:- "6. Learned counsel for the revenue has contended that the respondents cannot pay the service tax from the Cenvat credit availed by them. But this argument has no force, because a perusal of para 2.4.2 of CBEC's Excise Manual of Supplementary Instructions shows that there is no legal bar to the utilisation of Cenvat credit for the purpose of payment of service tax on the GTA services. 7. Apart from the above, even as per Rule 3(4)(e) of the Cenvat Credit Rules, 2004, the Cenvat credit may be utilized for payment of service tax on any output service. 8. In the present case also, the service tax....