Custom, Excise & Service Tax Tribunal
M/S Mahavir Spinning Mills Ltd vs Cce, Jallandhar on 24 April, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. I DATE OF HEARING/DECISION : 24/04/2014. Service Tax Appeal No. 128 of 2009 [Arising out of the Order-in-Review No. 68/CE/Jal/2008 dated 20/11/2008 passed by The Commissioner (Appeals), Central Excise Commissionerate, Jallandhar.] For Approval and signature : Honble Shri Justice G. Raghuram, President Honble Shri Rakesh Kumar, Member (Technical) 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 would 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 : Department Authorities? M/s Mahavir Spinning Mills Ltd. Appellant Versus CCE, Jallandhar Respondent
Appearance Shri Rupendra Singh, Advocate for the appellant.
Shri Amresh Jain, Authorized Representative (DR) for the Respondent.
CORAM : Honble Shri Justice G. Raghuram, President Honble Shri Rakesh Kumar, Member (Technical) Final Order No. 52123/2014 Dated : 24/04/2014 Per. Rakesh Kumar :-
The only point of dispute in this case is as to whether during period from 01/04/05 to 30/09/05 the appellant,a manufacturer of excisable goods and who had availed the taxable service of goods transport agency and was liable to pay service tax in respect of the same as service recipient, could pay the service tax on the GTA services received by them by utilizing the Cenvat credit. The department were of the view that the GTA service received by the appellant, in respect of which they were liable to pay service tax as service recipient in terms of the provisions of law, could not be treated as their output service and, hence, the Cenvat credit could not be utilized for payment of service tax on the GTA service received by the appellant. Accordingly the Department initiated proceedings for recovery of the service tax amounting to Rs. 3,35,800/- alongwith interest and also for imposition of penalty as the appellant had paid this service tax by utilizing Cenvat credit. The Jurisdictional Deputy Commissioner vide order-in-original dated 28/05/07, dropped the proceedings against the appellant. However, this order of the Deputy Commissioner was reviewed by the Jurisdictional Commissioner of Central Excise and Service Tax and the Commissioner vide order-in-review dated 20/11/2008 confirmed the service tax demand of Rs. 3,35,800/- against the appellant alongwith interest and imposed penalty Rs. 100/- per day on them under Section 76 of the Finance Act, 1994. The Commissioner in this order has held that since the GTA service receive by the appellant was not their output service, the Cenvat credit could not be utilized by them for payment of service tax on the GTA service. Against this order of the Commissioner this appeal has been filed.
2. Heard both the sides.
3. Shri Rupendra Singh, Advocate, the learned Counsel for the appellant, pleaded that the issue involved in this case stands decided in favour of the appellant by the judgments of Honble Punjab & Haryana High Court in the case of CCE, Chandigarh vs. Nahar Industrial Enterprises Ltd. reported in 2012 (25) S.T.R. 129 (P&H) and of Honble Himachal Pradesh High Court in the case of CCE vs. Auro Spinning Mills reported in 2012 (26) S.T.R. 413 (H.P.), and that the Tribunal also in the case of Kansara Modler Ltd. vs. CCE, Jaipur II reported in 2013 (32) S.T.R. 209 (Tri. Del.), has taken the same view. He, therefore, pleaded that the impugned order of the Commissioner is not sustainable.
4. Shri Amresh Jain, the learned DR, defended the impugned order by reiterating the findings of the Commissioner and relied upon judgment of the Tribunal in the case of ITC Ltd. vs. CCE, Guntur reported in 2011 (23) S.T.R. 41 (Tri. Bang.).
5. We have considered the submissions from both the sides and perused the records.
6. Though the Division Bench of the Tribunal in the case of ITC Ltd. vs. CCE, Guntur (supra) has taken the view that for payment of service tax on the GTA service by the recipient of this service, the Cenvat credit could not be used by him, Honble Punjab & Haryana High Court in the case of CCE, Chandigarh vs. Nahar Industrial Enterprises Ltd. (supra) and Honble Himachal Pradesh High Court in the case of CCE vs. Auro Spinning Mills (supra) have taken a contrary view which is in favour of the appellant. In view of this, we hold that the impugned order, not being in accordance with the rulings of Honble Punjab & Haryana High Court in the case of CCE, Chandigarh vs. Nahar Industrial Enterprises Ltd. (supra) and Honble Himachal Pradesh High Court in the case of CCE vs. Auro Spinning Mills (supra), is not sustainable. The same is set aside. The appeal is allowed.
(Operative part of the order pronounced in the open court.) (Justice G. Raghuram) President (Rakesh Kumar) Member (Technical) PK ??
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