Appeal Nos.St/S/41080/2014 & ... vs Unknown
- CitationAppeal No.31-32/2014
Ratio decidendi
The rule this decision rests on
Cenvat credit is available in respect of service tax paid on network services where those services are availed to keep the assessee's own computer network and mail/server functional, and that network forms an integral part of the means by which the output service is generated, so the network service is an input service attributable to the output service. Service tax paid on goods transport agency (GTA) services is not disallowed as cenvat credit where the assessee has reversed the amount claimed, as a precautionary measure, the disputed credit having therefore been neutralised. Where the transport service provider was registered and the service tax element was shown in the invoices as discharged by it, the assessee cannot be denied credit on the ground that the tax was not paid by the transporter; denial would amount to double taxation, so the credit must be allowed in the absence of any contrary evidence that the provider did not deposit the tax.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[Arising out of Order-in-Appeal No.31-32/2014 (MST) dt. 30.1.2014 passed by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Chennai]
Appeal Nos. ST/S/41522/2014 & ST/41252/2014 ST/S/41522/2014 & ST/41252/2014
Appellant : Commissioner of Service Tax Chennai Respondent : Doosan Infracore (India) Pvt. Ltd.
[Arising out of Order-in-Appeal No.31-32/2014 (MST) dt. 30.1.2014 passed by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Chennai]
Appearance:
Shri S.Viswanathan, Advocate For the Assessee
Shri R. Subramaniyan, AC (AR) For the Revenue
ORAM:
Honble Shri D.N. Panda, Judicial Member
Date of hearing/decision :1.5.2015
FINAL ORDER No.40518-40520/2015
The assessee's appeal is against disallowance of cenvat credit of Rs.2,51,666/- covered by show cause notice No.217/2012 dt. 24.4.2012. This is on account of net work services availed by the appellant held to be not attributable to the output service provided, whereas the learned counsel submits that it has direct nexus since the appellant is engaged in the management, maintenance & repair services of heavy engineering and I.T network services were used in input services for which expenditure incurred by appellant has suffered service tax.
2. The appeal is taken up today for disposal as the matter is on limited compass. The question involved is whether the service tax paid on net work service availed by the appellant for its computer net work to provide input service for generation of output service of management, and repair of heavy machinery, shall entitle the assessee to the cenvat credit of that tax. The network services availed by the appellant to make its own mail/server functional having its integral connection to generate the output service is a tool for such output service. Therefore, appellant deserves relief on this count. Revenues both the appeals are trying to disallow the relief granted on account of network service availed by the appellant which is of the nature aforesaid. In view of the factual and legal position above, Revenues appeals on this count is dismissed.
3. The second grievance of Revenue is that the taxes paid for GTA service availed is not permissible as cenvat credit to the assessee. But learned authority below found that Rs.6,09,756/- towards service tax on GTA is covered by SCN No.50/2011 dt. 14.3.2011 having been discharged by the assessee, it claimed benefit of cenvat credit to that extent only. Ld. Counsel submits today that as an abundant caution, the said amount of Rs.6,09,756/- has also been reversed. Therefore, Revenues contention on this count of cenvat credit on GTA service fails for which Revenue's appeal is dismissed.
4.1 The next grievance of Revenue is against allowance of credit to the extent of Rs.1,54,565/- under GTA service covered by SCN No.50/2011 dt. 14.3.2011 which ought to have been paid by the appellant but not by the transporter. Learned Commissioner (Appeals) verified that transport service provider was registered and has discharged tax liability of the said amount verifiable from the invoices. He has also noticed that service provider has discharged this amount of service tax. Accordingly, he held that there cannot be double taxation for which appellant-assessee should get the relief.
4.2 In absence of any contrary evidence as to the deposit of that amount of service tax by the GTA service provider, learned Commissioner (Appeals) has reached to a proper conclusion for which the Revenue's appeal on this count is dismissed.
5. The service tax element of Rs.6,09,756/- covered by SCN No.50/2011 dt. 14.3.2011 and Rs.10,46,675/- covered by SCN No.217/2012 dt. 24.4.2004 relate to GTA service, being of the nature above followed by reversal already done by assessee as abundant caution, Revenue fails on this count.
6. In the result, Revenues both the appeals are dismissed and assessee's appeal is allowed. Stay applications stand disposed accordingly.
(Dictated and pronounced in open court)
(D.N. PANDA) JUDICIAL MEMBER
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