Custom, Excise & Service Tax Tribunal
M/S. Gimatex Industries Pvt. Ltd vs Cce Nagpur on 1 June, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPEAL NO. E/25/10 Mum
Arising out of Order-in-Appeal No. SR/253/NGP/2009 dated 6.11.2009 passed by the Commissioner of Central Excise & Customs (Appeals), Nagpur.
For approval and signature:
Shri. Ashok Jindal, Member (Judicial)
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 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 : Seen
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
M/s. Gimatex Industries Pvt. Ltd.
:
Appellant
Versus
CCE Nagpur
Respondent
Appearance Shri G.L. Deshpande, Advocate for appellant Shri For Respondent CORAM:
Shri. Ashok Jindal, Member (Judicial) Date of Hearing : 01.06.2011 Date of Decision ...
ORDER NO.
Per Shri Ashok Jindal The appellant M/s. Gimatex Industries Pvt. Ltd. are in appeal against the order of demand of duty of Rs.78,740/- along with interest and equal amount of penalty.
2. The facts of the case are that the appellants are the manufacturer of cotton yarn and registered with the department under Central Excise Act, 1944 as well as under Service Tax under the category of GTA service. Therefore, they were availing CENVAT credit on capital goods and input service credit. On verification it was found that during the period from April, 2005 to September, 2007 the appellants have paid service tax on freight for outward transportation of finished goods through CENVAT credit account not in cash. Therefore, a show-cause notice was issued. Both the lower authorities confirmed the demand as per the cost proposed in the show-cause notice along with the interest and penalty. Aggrieve by the said order, the appellants are in appeal before this Tribunal.
2. Shri G.L. Deshpande, learned Advocate for the appellants submitted that the appellants are the manufacturer of excisable goods, therefore their case is squarely covered by the decision in the case of Commissioner of Service Tax, Mumbai vs. Phills Engineering Corporation 2010 (20) STR 692 (Tri. Mumbai) which was passed by this Tribunal following the decision of Commissioner vs. Nahar Industrial Enterprises Ltd. 2007 (7) S.T.R. 26 (Tri.) and M/s. India Cement Ltd. v. CCE 2007 (7) S.T.R. 569 (Tri. Chennai) wherein it has been held that prior to Notification No. 10/2008-C.E. (N.T) dated 1.3.2008 the appellant can utilize the amount lying in their CENVAT credit for payment of service tax on outward transportation service. Therefore, the impugned order be set aside and the appeal be allowed.
3. On the other hand the learned SDR relying on the decision of M/S ITC Ltd. vs. CCE Guntur 2011-TIOL-568-CESTAT-BANG wherein it was held by this Tribunal that recipient of GTA service who is not engaged in providing any taxable output service or manufacture of dutiable final product not entitled to utilize CENVAT credit A/c for discharging service tax on GTA services, therefore the lower authorities has rightly confirmed the demand along with interest and penalty hence the appeal be rejected.
4. Heard and considered.
5. After careful consideration of the submissions made by both the sides I find the dispute is that prior to 01.03.2008 whether the appellants are eligible to pay service tax on GTA services from CENVAT credit or not? The reliance of the learned SDR in the case of M/s ITC Ltd. (supra) is not relevant to the facts of this case. In fact in that case the recipient of GTA service was never engaged nor manufactured in dutiable final product. Therefore, the Tribunal has held that the said assessee is not entitled to utilize CENVAT credit for discharging service tax on GTA service. In the case of Commissioner of Central Excise, Chandigarh v. Nahar Industrial Enterprises Ltd. & Others Honble Punjab & Haryana High Court has held that a person who manufacture excisable goods is eligible to pay service tax on GTA from CENVAT credit account. Further in the case of Phills Engineering Corporations (supra) this Tribunal has already taken a view that prior to 01.03.2008 the assessee is entitled to utilize CENVAT credit to pay service tax on GTA. Following the ratio of the decision of the Tribunal in the case of Phills Engineering Corporation I hold that the appellants are entitled to utilize CENVAT credit for payment of Service Tax on GTA service. Therefore, the impugned order is set aside. Appeal is allowed with consequential relief, if any.
(Pronounced in open Court on.) (Ashok Jindal) Member (Judicial) nsk 4