Customs, Excise and Gold Tribunal - Delhi
Ambattur Petrochem Ltd., Prakriti ... vs Cce on 22 June, 2007
ORDER C.N.B. Nair, Member (T)
1. The issue raised in all these appeals is the same. When the admission application came up, I have perused the record and heard both sides at length. It is seen that the appeals themselves can be disposed of. Accordingly, after granting admission, I proceed with the appeals.
2. All the appellants are manufacturers of Chlorine parafide. They are required to pay service tax in regard to goods transport service, involved in the transport of materials to their factories. They are also entitled to taking credit of the service tax so paid in regard to transport of materials to their factory.
3. The only question raised is whether the service tax paid can be utilized for payment of service tax in relation to tax payable on subsequent transport. The impugned order has held that since the appellant is a manufacturer of products, they are not entitled to using service tax credit for payment of service tax on transport services.
4. The submission of the learned representative is that this issue had come up before the Tribunal in the case of Nahar Industrial Enterprises Ltd. and the Tribunal held that there is no restriction on the use of service tax credit for payment of service tax or for payment of excise duty.
5. Sub-rule 4 of Rule 3 of Cenvat Credit Rules 2004 relate to utilization of Cenvat credit. That sub-Rule makes it clear that credit can be utilized for payment of excise duty as well as service tax on any output service. Thus, payment of service tax is a specifically authorized item in regard to service tax credit. In the present case, the appellant is treated as a service provider when he it service tax on transport service. Corollary of it is that the transport involved is an output service. Therefore, the finding of the Commissioner that since the appellants are manufacturers of excisable goods they cannot be treated as provider of output service is not sustainable. This Tribunal's decision in the case of Nahar Industrial Enterprises Ltd. also supports the appellant's case.
6. In the result, the appeals succeed and are allowed with consequential relief, if any, to the appellants.
(Dictated and pronounced in open court)