Custom, Excise & Service Tax Tribunal
M/S. Kanoria Chemicals & Industries Ltd vs C.C.E, Allahabad on 9 April, 2013
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW DELHI
Court No. III
Date of Hearing: 09.04.2013
For Approval and Signature:
Honble Shri, Justice G. Raghuram, President
Honble Shri, Sahab Singh, Technical Member
1. Whether Press Reporters may be allowed to see : No
The order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it would be released under Rule 27 of : Yes
The CESTAT (Procedure) rules, 1982 for
Publication in any authoritative report or not?
3. Whether their lordships wish to see the fair : Seen
copy of the order?
4. Whether order is to be circulated to the : Yes
Department Authorities?
ST/480/2008 and
ST/419/2008
(Arising out of Order-in-Original No.(ST-139/2006) 32 2008, dated 31.03.2008 passed by the Commissioner, Central Excise, Allahabad)
1. M/s. Kanoria Chemicals & Industries Ltd. Appellant
Vs
C.C.E, Allahabad Respondent
2. C.C.E, Allahabad Appellant
Vs
M/s. Kanoria Chemicals & Industries Ltd. Respondent
Coram: Honble Shri, Justice G. Raghuram, President
Honble Shri, Sahab Singh, Technical Member
Appearance:
Appeared for the Appellant: Shri, A.P. Mathur, Adv.,
Appeared for the Respondent: Shri, Amresh Jain, D.R.
Final ORDER No.56068-56069/2013
Per Sahab Singh:
These are two appeals one filed by M/s Kanoria Chemicals & Industries Ltd. (hereinafter referred to as assessee) and 2nd by the Revenue against same Order in Original No. 32/2008 dated 31.3.2008 passed by the Commissioner of Central Excise Allahabad.
2. Brief facts of the case are that assessee is engaged in manufacture and sale of Chemicals and Chemical Products falling under chapter 28,29 and 38 of the first schedule to the Central Excise Tariff Assessee was availing Cenvat Credit of duty and tax paid on inputs, capital goods and input services. During the period April 2005 to March 2006 the assesse paid the service tax of Rs. 50,01,852/- on input services through Cenvat Account instead of cash. Department was of the view that tax through Cenvat Account can be paid on any output service only. Since GTA services is not an output service for the assessee, they can not pay service tax by utilizing Cenvat Credit. Accordingly a Show Cause Notice dated 18.10.2006 was issued to them which was adjudicated by the Commissioner vide impugned order in which Commissioner confirmed the tax amounting Rs. 50,01,852/- along with interest and imposed the penalty of Rs. 200/- per day for each day of default or at the rate of 2% of tax amount per month till payment subject to maximum of Rs. 50,01,852/- under section 76 of the Act. Assessee challenged the order in present appeal. Revenue is in appeal for increasing the penalty under section 76 of the Act.
3. Heard both sides.
4. We find that assessee is receiving inward GTA services as well as outward GTA services and paying service tax on the services through Cenvat Account. Contention of the Revenue is that assessee is not providing any output services and therefore is required to pay service tax in cash though PLA. Issue came up before High Court of Punjab & Haryana in case of Commissioner of Central Excise Vs Nahar Industrial Enterprises Ltd. reported in 2012(25) STR 129 (P & H) for consideration of the following question of law.
Whether a person who is not a actual service provider, but discharges the service tax liability on the Taxable Services, under Section 68(2) of Finance Act, 1994 as a deemed service provider, is entitled to avail the CENVAT credit on inputs/input services/capital goods for payment of GTA service tax, even if he is not using such inputs/input services/capital goods for providing taxable services by virtue of deeming legal fiction? Court held that by virtue of deeming legal fiction, assessee can discharge the service tax liability availing Cenvat Credit taken on inputs/input services even if these were not used in providing taxable service. Same view was taken by Delhi High Court in case of Commissioner of Service Tax Vs Hero Honda Motors Ltd. reported in 2013 (29) STR 358 (Del.) Following these decisions we are therefore of the view that assesse can pay the service tax liability on GTA service through Cenvat Account. We order accordingly.
5. Assesses appeal is allowed and Revenue appeal is rejected.
(JUSTICE G. RAGHURAM) President (Sahab Singh) Member Technical Neha 2