Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise vs M/S. Winsome Yarns Ltd on 9 November, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. IV
Service Tax Appeal No. 488 of 2010-SM(BR)
[Arising out of Order-in-Appeal No. 10/ST/APPL/CHD-II/2010 dated 11.2.2010 passed by the Commissioner of Central Excise (Appeals), Chandigarh.]
For approval and signature:
Hon'ble Ms. Archana Wadhwa, 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?
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?
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Commissioner of Central Excise Appellants Chandigarh
Vs.
M/s. Winsome Yarns Ltd. Respondent
Appearance:
Shri K.P. Singh, SDR for the Appellants
Shri Rupender Singh, Advocate for the Respondent
Date of Hearing/decision : 9.11.2010
ORAL ORDER NO . ________________________
Per Archana Wadhwa:
Being aggrieved with the order passed by the Commissioner (Appeals), Revenue has filed the present appeal. I have heard Shri K.P. Singh, learned SDR appearing for the Revenue and Shri Rupender Singh, learned Advocate appearing for the respondents.
2. As per facts on record, appellant is engaged in the manufacture of cotton yarn and cotton blended yarn falling under Chapter 52 and 55 of Central Excise Tariff Act, 1985. The respondent is also registered with the Department for Service Tax in respect of goods transport agency, as deemed provider of services under the said category. During the period January, 2005 to November, 2005, they utilised Cenvat credit on inputs / input services / capital goods for discharge of their Service Tax liability on GTA services.
3. Revenue entertained a view that the assessee was not entitled to use the otherwise earned Cenvat Credit for payment of Central Excise tax on GTA services so availed by them. Accordingly, the proceedings were initiated against them by way of issuance of show cause notice dated 13.3.06, which culminated into an order passed by the original adjudicating authority confirming the demand along with interest and imposition of penalty.
4. On appeal against the above order, Commissioner (Appeals), while relying upon the various decisions of the Tribunal held that a person who is liable to pay Service Tax is considered to be providing an output services, as such the deemed services provider is liable to pay service tax, so the output service provider could utilise the Cenvat credit earned for discharge of Service Tax on such output services. He took into consideration explanation under Rule 2(p) of Cenvat Credit Rules, 2004, which was omitted with effect from 19.4.06. Accordingly, he held that as demand pertaining to the period January, 2005 to November, 2005 i.e. before such Rule was omitted, there was no restriction for utilising Cenvat credit for discharge of Service Tax on GTA services.
5. The appellate authority also relied upon the various decisions of the Tribunal as detailed in para 5.3 of his order which is being reproduced for better appreciation.
5.3 Further, I observe that the Honble CESTAT in the following decisions have held that Service Tax on GTA service could be paid by utilizing Cenvat Credit:
Bhushan Power & Steel Ltd. vs. CCE -2008 (10 )STR 18(Tri-Kol) India Cement Ltd. vs. CCE 2007 (7) STR 569 (Tri-Chennai) Andhra Pradesh Paper Mills vs. CCE2007 (8) STR 1669 (Tri-Bang) Soundaraja Mills Ltd. vs. CCE 2008 (223) ELT 203 (Tri-Chennai) CCE vs. Rishabh Spinning Mills Ltd.-Final Order No. 1070-71/ 2008-SM (BR) dated 3.7.2008 CCE Chd vs. Nahar Exports Ltd. -2008 (223) ELT (Tri-Del)
6. Revenue in their memorandum of appeal has not disputed or doubted the applicability of the above decision of the Tribunal. However, it is their contention that the decision relied upon by the Commissioner (Appeals) have not been accepted by the department and appeal stands filed before the respective High Courts against such decisions.
7. Learned Advocate appearing for the respondents draws my attention to Punjab and Haryana High Court judgement dated 6.5.2010 vide which the appeals filed by the Revenue against the Tribunal judgement in the case of M/s. Nahar Industrial Enterprises Ltd. and number of other judgements was dismissed. It stands observed by the Honble High Court that in terms of Para 2.4.2 of CBEC Excise Manual of Supplementary Instructions, there is no legal bar to the utilisation of Cenvat credit for the purpose of payment of service tax on the GTA services. It stands further observed that apart from the above, even as per Rule 3(4)(e) of the Cenvat Credit Rules, 2004 the Cenvat credit may be utilised for payment of Service Tax on any output services. Accordingly, the appeals filed by the Revenue stand dismissed by observing that Commissioner (Appeals) as well as the Tribunal have rightly held that the respondents were entitled to pay service tax from the Cenvat credit.
8. As the issue now stands decided by the above decision of the Punjab & Haryana High Court vide which the decisions relied upon by the Commissioner (Appeals) stand upheld, I find no infirmity in the view adopted by the Commissioner (Appeals). Accordingly, the appeal filed by the Revenue is rejected.
( Archana Wadhwa ) Member(Judicial) ss ??
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