2007 (9) TMI 93

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....he appellants are manufacturers of cotton yarn. They pay service tax on "Goods Transport Agency's Service" received in connection with inward movement of their inputs. They also pay similar tax on similar service received in connection with outward movement of their final product. In both the instances, they are service recipients. During the period of dispute (Oct. '05 to March '06), for payment of this tax, they utilized credit of duty paid on inputs and capital goods as also credit of service tax paid on input service. This was objected to by the department. Both the lower authorities sustained this, objection and demanded Rs. 2,65,311/- equivalent to the credit found to have been 'wrongly' utilized for the above peri....

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....ich he is liable to pay service tax shall be deemed to be the out put service." It has been pointed out by learned counsel that the Explanation was omitted on 19-04-2006 and the same was in force during the period of dispute. In the present case, the appellants were only receiving taxable services and not providing any, but they were discharging Service Tax liability in respect of the "Goods Transport Agency's Service" received for the inward and outward movement of goods. As per the above Explanation, where a person liable for paying Service Tax does not provide any taxable service, the service for which he is liable to pay Service Tax shall be deemed to be 'out put service'. Accordingly, the "Goods Transport Agency's Se....