Custom, Excise & Service Tax Tribunal
M/S. Rain C-Ii Carbon (India) Ltd vs Cce, Visakhapatnam on 22 October, 2010
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench SMB
Court II
Date of Hearing: 22/10/2010
Date of decision:22/10/2010
Appeal No.ST/991/09
(Arising out of Order-in-Appeal No.93/2009(V-I)ST dt. 30/9/2009 passed by CCE, C&ST(Appeals), Visakhapatnam)
For approval and signature:
Honble Mr. M.V.Ravindran, Member(Judicial)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether their Lordship wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
M/s. Rain C-II Carbon (India) Ltd.
..Appellant(s)
Vs.
CCE, Visakhapatnam
Respondent(s)
Appearance Mr. Y. Sreenivasa Reddy, Advocate for the appellant.
Mr. K.S. Chandrasekhar, JDR for the Revenue.
Coram:
Honble Mr. M.V.Ravindran, Member(Judicial) FINAL ORDER No._______________________2010 Per M.V.Ravindran This appeal is directed against the Order-in-Appeal No.93/2009(V-I)ST dt. 30/9/2009.
2. The relevant facts that arise for consideration are that during the period January, 2005 to December, 2006, lower authorities noticed that the appellants had used Cenvat Credit for payment of service tax on the services rendered by them under the category of Transport of Goods by road services. It is Departments contention that the said output service is not a output service per se but tax liability is being discharged as recipient of Good Transport services. Both the lower authorities hold that the appellants are not eligible to use the Cenvat Credit for discharge of service tax liability.
3. Heard both sides and perused the records.
4. On perusal of the records, I find that the issue to be decided is whether the appellants are eligible to utilize the Cenvat Credit for payment of service tax on output services i.e. Goods Transport services for the period January, 2005 to December, 2006. I find that the issue is no more res integra as the Division Bench decision of the Tribunal in the case of India Cements Ltd. [2007(7) STR 569 (Tri. Chennai)] is directly on the point. The ratio of the said decision is reproduced below:-
3. After examining the provisions of the Cenvat Credit Rules, 2004, we come across an Explanation to the definition of output service under Rule 2(p), which reads as under :-
Explanation. - For the removal of doubts it is hereby clarified that if a person liable for paying service tax does not provide any taxable service or does not manufacture final products, the service for which he is liable to pay service tax shall be deemed to be the output service. Admittedly, the appellants did not provide any taxable service, though they did manufacture an excisable product. Again, it is not in dispute that they were liable to pay service tax on GTA Service received by them in connection with clearance of their product from factory. But for the above Explanation, the GTA Service so received by the appellants would have been covered under the definition of input service under Rule 2(l) of the aforesaid Rules. By virtue of the Explanation, it shall be deemed to be output service. In other words, the appellants, while paying service tax on GTA Service availed in connection with removal of their final product from factory, were doing so on an output service and, therefore, they were entitled to utilize, for payment of service tax on such service, credit of the tax paid on the input GTA service availed by them in connection with receipt of inputs into their factory. Apparently, learned Commissioner lost sight of the above Explanation to the definition of output service.
It is also seen that the said decision was followed by this very Bench in the case of CCE, Belgaum Vs. Flowserve Microfinish Valves Pvt. Ltd. [2008(10) STR 21 (Tri. Bang.)].
5. Accordingly, in light of the facts and precedent decisions on an identical issue, I find that the impugned order is unsustainable and is liable to be set aside and I do so. The impugned order is set aside and the appeal is allowed with consequential relief.
(Pronounced and dictated in open court) (M.V.RAVINDRAN) MEMBER (JUDICIAL) Nr 3