TaxTMI 
TaxTMI 
2015 (12) TMI 1059
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....Agency (GTA) service and Business Auxiliary (BAS) service. The appellants are service recipient of GTA services and are liable to pay service tax under reverse charge mechanism as per sub-section (2) of Section 68 of the Finance Act, 1994. They are also service recipient of BAS from foreign based export agents to whom they pay commission and by reverse charge, again, they are liable to pay service tax under provisions of Section 66A of the Finance Act, 1994, read with Rule 2(i)(d)(iv) of Service Tax Rules, 1994. 2. During the scrutiny of ST-3 returns for the half year ending March, 2007 to September, 2007, it was found that appellants had made payment of service tax under GTA and BAS services by utilizing their credit in Cenvat Credit a....
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....the assessee can utilize Cenvat Credit to discharge the service tax liability towards GTA services. Following the dictum laid in the above judgments, we hold that the appellant succeeds with regard to the issue of GTA services. So in the present case, the dispute narrows down to the question whether the appellants can utilize Cenvat Credit to pay the service tax towards BAS services i.e., the services received from foreign based export agents. For better appreciation the relevant provisions are noticed as under: Rule 2(i)(d) of Service Tax Rules, 1994 defines a "person liable for paying service tax and clause (iv) of the definition is: (iv) in relation to any taxable service provided or to be provided by any person from a country o....
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....or appellant Ms. Priyank Goel argued very strongly referring to the various provisions noticed above. She urged that by reading Rule 2(p) and Rule 2(r) together, the appellant being a person liable for paying service tax shall also be treated as a provider of output service. In such scenario, the appellant is eligible to utilize the credit to pay the service tax under the Cenvat Credit Rules. That the Cenvat credit scheme has been framed for the purpose of availing and utilizing credit. In the said rules, the term "provider of taxable service" has been defined to include a person who ultimately pays service tax. The intention is to entitle the person liable to pay service tax to utilize the credit for paying such tax. If a person liable to ....
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....ion of Service Rules, 2006 enacted under the Finance Act, 1994 inter alia lays contains provisions governing the services which are provided from outside India and received in India. Rule 5 of the said Rules prevents the utilization of credit for discharging Service Tax on taxable services provided from outside India and received in India. In view thereof the demand of service tax as deemed provider of BAS services as per the impugned order does not warrant any interference. The same is upheld. The impugned order to the extent of demand of service tax on account of GTA services as discussed above, is set aside. 11. The Commissioner (Appeals) has upheld the penalty imposed under Section 76 of Finance Act, observing that the appellant ough....