Custom, Excise & Service Tax Tribunal
M/S. Mahindra Ugine Steel Co. Ltd vs Commissioner Of Central Excise, Raigad on 29 February, 2008
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
COURT NO.
Application No. ST/S/114/08
Appeal No.ST/24/08
(Arising out of Order-in-Appeal No. SRK/517/RGD/2007 dt. 27.09.2007 passed by the Commissioner of Central Excise (Appeals) Mumbai-II
For approval and signature:
Hon'ble Shri M. V. Ravindran, Member (Judicial)
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1. Whether Press Reporters may be allowed to see : the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether Their Lordships wish to see the fair copy : of the Order? 4. Whether Order is to be circulated to the Departmental : authorities? ============================================================= M/s. Mahindra Ugine Steel Co. Ltd. : Appellant VS Commissioner of Central Excise, Raigad Respondent Appearance Shri Bharat Raichandani, Advocate for Appellant Shri D.P. Mukhopadhya, Authorized Representative (JDR) CORAM: Shri M. V. Ravindran, Member (Judicial) Date of decision 29/2/08 ORDER NO.................................................... Per : Shri M. V. Ravindran, Member (Judicial)
This stay application is directed against the confirmation of demand of Rs.4,67,139/- and Education Cess Rs.9,342/- + interest at appropriate rate under Section 75 of the Finance Act, 1944 and penalty of Rs.14,36,383/- under the provisions of Section 76 read with Section 78 of the Finance Act, 1944.
2. After hearing both sides for some time on the stay application, I find that the issue involved in this case is squarely covered by the various decisions of the Tribunal, hence after granting waiver the pre-deposit of the amount involved, the appeal is taken up for disposal.
3. The issue involved in this case is regarding the confirmation of demand of Service tax on the ground that the appellant has used the cenvat credit for discharging the service tax liability on the services provided by Goods Transport Agency to the appellant. The Ld. Adjudicating authority held against the appellant and on an appeal the Ld. Commissioner (Appeals) has came to the following findings while upholding the order-in-original:-
"In terms of Rule 3(4) of the Rules, Cenvat Credit can be utilized for the following payments:
(a) any duty of excise payable on any final products;
(b) ..................................................................
(c) ...................................................................
(d) service tax on any output service In terms of the Cenvat Credit Rules, 'output service' means any taxable service provided by the provider of taxable service to the service receiver. Further, the definition of 'provider of taxable service' includes a person liable to pay service tax. Therefore, reading the two definitions in conjunction, it is clear that, to form 'output service', taxable service has to be actually provided by the 'provider of taxable service'. Even if due to a legal fiction, a consignor or a consignee qualifies to fall under the definition of a person liable to pay service tax' (and consequently a 'provider of taxable service'), it cannot be said that he has actually provided any taxable service. The service provided by a Goods Transport Agent (GTA) for which the consignor the consignee is made liable to pay service tax does not become an "output service" for such consignor or the consignee. Therefore, the service tax payable by the appellant consignor on transportation of goods by road cannot be paid through credit accumulated by such consignor or consignee. The reason is that they were manufacturer and not the service provider. The transport service is being provided by the 'goods transport agency' and the appellant paid the service tax only for the reason that the liability for payment of service tax has been shifted to the service received. Accordingly, the appellant had to pay service tax in cash on goods transport by road service".
4. The Ld. Counsel submits that the issue is no more res-integra and covered by the various decision of the Tribunal he cites the following two Division Bench decision.
[i] M/s. Bhushan Power & Steel Ltd. Vs. Commissioner of Central Excise, Customs & Service tax, BBSR-II [2007-TIOL-1828-CESTAT-KOL] [ii] M/s. MMS Steels Ltd. & 26 Others Vs. CCE Trichy, Madurai, Salem [2007-TIOL-1317-CESTAT-MAD] [iii] India Cements Ltd. Vs. Commissioner of C.Ex., Salem [2007 (7) S.T.R. 569 (Tri.Chennai)] [iv] Andhra Pradesh Paper Mills Ltd. Vs. Commr. of C. Ex. Visakhapatnam-II [2007 (8) STR 166 (Tri.Bang.) The Ld. SDR would submits that the findings of the Ld. Commissioner (Appeals) are correct and the appellants are required to pay the Service Tax liability by cash.
5. The issue of utilization of cenvat credit for the payment of the service tax liability by the recipient of the services of Goods Transport Agency i.e. current appellant before me is settled by various orders of Tribunal. It is undisputed that the appellant had utilized cenvat credit for the discharge of the service tax liability of the services received from Goods Transport Agency. I find that the submission made by the Ld. Counsel the issue is squarely covered by the various decisions of the Tribunal is correct. The issue is no more res-integra. Accordingly, I find that the impugned order is unsustainable on the face of the series of judgments of the Tribunal.
6. In view of the above, the impugned order is liable to set aside and I do so. The appeal is allowed.
(M. V. Ravindran) Member (Judicial) Sm 3