Custom, Excise & Service Tax Tribunal
Sri Chakra Cements Ltd vs Commissioner Of Central Excise ... on 30 January, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: ST/343/2010-SM [Arising out of Order-In-Appeal No. 94-2009 dated 30/09/2009 passed by CCE(Appeals), Visakhapatnam] For approval and signature: HON'BLE Shri B.S.V.MURTHY, TECHNICAL MEMBER 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? SRI CHAKRA CEMENTS LTD ANNAMARAJUPETA, ALAMANDA (RS) VIZIANAGARAM DIST, AP. Appellant(s) Versus Commissioner of Central Excise ,Customs and Service Tax VISAKHAPATNAM-I NULL CENTRAL EXCISE BUILDING PORT AREA VISAKHAPATNAM - 530035 ANDHRA PRADESH Respondent(s)
Appearance:
Shri B.N GURURAJ, Advocate 22.2, 3 RD MAIN ROAD CHAMARAJ PET, BANGALORE , -
KARNATAKA For the Appellant Shri S. Teli, Deputy Commissioner(AR) For the Respondent Date of Hearing: 30/01/2015 Date of Decision: 30/01/2015 CORAM:
HON'BLE Shri B.S.V.MURTHY, TECHNICAL MEMBER Final Order No. 20371 / 2015 Per : B.S.V. MURTHY 1.1. The appellant is a company and a Central Excise assessee engaged in manufacture of Ordinary Portland Cement. The appellant has been availing Cenvat credit on the inputs, input services and capital goods used by it. After the introduction of service tax on GTA services, the appellant is also a deemed assessee for the purpose of discharging service tax on the GTA service availed by it.
1.2. The appellant submits that during the months of February, March and August of 2006, it had discharged the service tax liability on GTA service by debiting the service tax due in their Cenvat Credit account.
1.3. Pursuant to Audit conducted, the Revenue sought to recovery service tax on GTA service in cash on the ground that it was impermissible to utilize Cenvat credit for discharging service tax liability on GTA service availed. On the basis of this objection, the appellant paid the sum of service tax due, i.e., rs.3,52,810/- under TR6 challan No. 07, dated 19.2.2007: Rs.1,68,154 for the month of February 06; Rs. 43,459/- for the month of March 06; Rs.1,40,797/- for the month of August 2006.
1.4. The appellant states that subsequently, on 25.12.2008, show cause notice in C No. IV/09/62/2008 Adjn, was issued alleging that the appellant was further liable to pay interest of Rs.34,705/- on the said service tax besides becoming liable to penalty under section 77 of the Finance Act, 1994. The appellant was directed to show cause against the proposals in the notice.
1.5. The appellant replied to the notice on 5.2.2009 contending that various decisions of the Hon'ble Tribunal have held that "output service provider" includes persons who are deemed assessees and hence, utilization of Cenvat Credit was legally correct; that such decision in Nahar Industrial Enterprises Ltd v. CCE, 2007 (7) STR 26 (T-Del) had been followed in as many as 13 decisions of the other Benches of the Tribunal; that in the absence of stay of these decisions by the High Courts, the notice's contention that the matter had not attained finality is wrong; that in another appeal, jurisdictional Commissioner of Central Excise (Appeals), Visakhapatnam had already set aside the demand in their own case in OIA No. 18/2008 (V-1) ST, dated 13.6.2008, and held that Cenvat credit could be utilized for paying service tax on GTA services utilsied. On this basis, the appellant prayed for dropping the proceeding.
1.6. The appellant submits that on 16.6.2009, the original authority passed the order, after recording that the appellant did not want personal hearing. By this order, the original authority ordered appropriation of the sums paid in cash towards GTA service tax liability, demanded interest of Rs.34,705/- and also imposed penalty of Rs.5000/- on the appellant.
1.7. Aggrieved by the original order, the appellant filed appeal before the Commissioner of Central Excise (Appeals), Visakhapatnam that in view of large number judgments of the Hon'ble Tribunal relied on in the Grounds of Appeal, utilization of Cenvat for payment of GTA service tax was proper; that the attempt to distinguish the binding precedents was vain; that in the absence of default in paying service tax, demand of interest was unjustified; that in the facts and circumstances, penalty was not imposable.
1.8. The appellant states that the lower appellate authority heard the appellant on 16.6.2009 and passed the impugned order, setting aside the penalty imposed under section 77, but upheld the demand of tax as well as interest. The lower appellate authority relied on Alstom Projects India Ltd v. CCE, 2008 (12) STR 23 (T-Chennai) which supported the view that a manufacturer was not entitled to be treated as 'deemed output service provider', ignoring the rest of the precedents relied on by the appellant. He did not enter any finding on why he could not follow OIA No. 18/2008 (V-1) ST, dated 13.6.2008 passed by his predecessor, in the appellant's own case.
2. I have considered the submissions. I find that the learned counsel for the appellants has relied upon as many as 14 decisions. However I take note of the fact that in the decision of the Larger Bench in the case of Panchmahal Steel Ltd. Vs. CCE&ST, Vadodara [2014(34) STR 351 (T-LB)] it has been held that CENVAT credit can be used for payment of service tax on GTA service. The decision of the Larger Bench clearly covers the issue. Since the CENVAT credit utilisation is held to be correct, there were no need for the payment by the assessee to make payments in cash subsequently and therefore interest is also not liable to be paid. Therefore the appeal is allowed with consequential relief, if any, to the appellant.
(Operative portion of this order pronounced in the court) B.S.V.MURTHY TECHNICAL MEMBER Raja..
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