Cce, Ludhiana vs Vardhman Spinning & General Mills

(Arising out of OIA No78/CE/CHD/2009 dt.24.03.09 passed by Commissioner of Central Excise (Appeals), Chandigarh)

CCE, Ludhiana Appellants

Vs.

Vardhman Spinning & General Mills Respondent

Appearance:

Present for the Appellant: Shri D.V.Nagvenkar, AR

Present for the Respondent: Shri Surjeet Bhadu, Advocate

HonbleMr.P.K.Das, Member (Judicial)

HonbleMr.P.S.Pruthi, Member (Technical)

1.

Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No

2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No

3. Whether their Lordships wish to see the fair copy of the order?

seen

4. Whether order is to be circulated to the Department Authorities?

Yes

Coram:Honble Mr.P.K.Das, Member (Judicial)

HonbleMr.P.S.Pruthi, Member(Technical)

Date of Hearing/decision: 21.01.2015

FINAL ORDER NO.50742/2015

PER: P.S.PRUTHI

The Revenue is in appeal against the impugned Order passed by the Commissioner (Appeals).

2. The facts of the case are that the respondent utilized manufacturing credit for discharging service tax liability towards GTA service received by them. The demand pertains to 1.4.2005 to 31.3.2006. The Revenues appeal is on the ground that the cenvat credit taken against inputs used for manufacturing activity cannot be used for payment of service tax. According to the Revenue, the transportation service is being provided by the Goods Transport Agency and the respondent was required to pay service tax for the reason that the liability for payment of service tax is shifted to receiver of transport service.

3. Learned Department Representative reiterated the grounds of appeal.

4. Learned Advocate for the respondent relied on the case of CCE, Chandigarh vs. Nahar Industrial Enterprises Ltd.-2012 (25) STR 129 (P&H).

5. We have considered the rival contentions.

6. We find in this case that although the respondent is the receiver of the GTA service, the respondent discharged service tax liability on such service on reversed charge basis as per law. Under section 68 (2) of Finance Act, 1994, the receiver is deemed to be provider of service. Once the respondent are treated as provider of transport service, during the relevant period, they will be entitled to use manufacturing credit on inputs for the payment of output service tax on GTA service. Reliance is placed on the case of Nahar Industrial Enterprises Ltd. (supra).

7. The appeal is dismissed.

(Pronounced in the court)

(P.S.PRUTHI) (P.K.DAS)

MEMBER (TECHNICAL) MEMBER(JUDICIAL)

mk

1