Chandra Engineers Versus Commissioner, CGST, Delhi-II
Central Excise
2019 (3) TMI 514 – CESTAT NEW DELHI – TMI
CESTAT NEW DELHI – AT
Dated:- 6-3-2019
Excise Appeal No. E/52018/2018-EX [SM] – Final Order No. 50315/2019
Central Excise
MRS. RACHNA GUPTA, MEMBER (JUDICIAL)
Present for the Appellant: Mr. Satish Chandra, Prop.
Present for the Respondent: Mr. P. Juneja, DR
ORDER
PER: RACHNA GUPTA
Present is an appeal preferred against the order of Commissioner (Appeals) bearing No.252 dated 18.04.2018. The said order is the adjudication to show cause notice No.30179 dated 08.06.2010, which was issued when during the course of audit, Department observed that the appellant has incurred expenses as carriage inward in the financial year 2007-08 to 2009-10 on which the service tax has been paid from the available inputs credit accounts. Denying goods transport agency to be an output service, that the Department proposed recovery of service tax for Rs. 1,06,782/- for p
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yond the scope of show cause notice is otherwise also liable to be set aside.
2. While rebutting these arguments, It is submitted by the Department that there is no infirmity in the order under challenge, which is based on the Circular dated 23.08.2007 titled as “procedural issues in Service Tax – Circular”. It is impressed upon that the Circular includes the issue relating to availment and utilization of cenvat credit clarifying that since the service provided by a goods transport agent for which the consigner or consignee is made liable to pay Service Tax, it does not become an output service for such consigner or consignee. Therefore, the Service Tax payable by the consigner or consignee on transportation of goods by road cannot be paid through credit accumulated by such consigner or consignee. Appeal is accordingly prayed to be dismissed.
3. After hearing both the parties, I am of the opinion as follows:-
4. The question to be adjudicated in the present appeal is: Whether a manu
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f the adjudicating authority that since GTA do not qualify to be an output service as such is not eligible for Cenvat Credit. Hence payment of Service Tax thereof cannot be made from the accumulated Cenvat Credit is opined as incorrect. Though there are several other proviso attached to this sub-rule (4) but none of those provisos are applicable to the given situation.
5.1 In addition, there is an explanation that cenvat credit cannot be utilized for payment of service tax in respect of services where the person liable to pay tax is the service recipient. But this explanation got incorporated in this Rule vide Notification No.28 dated 20th June, 2012 with effect from 1st July, 2012. The period here is 2007-08 to 2009-10. Hence, the explanation cannot be made retrospectively applicable to the impugned period for which the above condition holds a good law that cenvat credit may be utilized for payment of Service Tax on any output service (including GTA service). Hon'ble High Court of Pu
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