Cce, Tirunelveli vs M/S. Sterlite Industries (I) Ltd
- Case No.Appeal No. ST/434/2010
Ratio decidendi
The rule this decision rests on
Prior to 18.4.2006, CENVAT credit lying in an assessee's account may be utilised towards discharge of liability for a service availed (here, GTA service), the Explanation under Rule 2(p) of the CENVAT Credit Rules, 2004 having removed that facility only with effect from that date. Where the liability in question is one payable under the reverse charge mechanism and the recipient of the service has no specific statutory provision requiring it to be discharged from its own funds, the liability is not realisable and set-off of CENVAT credit against it is permissible; accordingly, where no liability arose for the period prior to 18.4.2006 in respect of consulting engineering services availed from abroad, no further inquiry into that issue is necessary.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
(Arising out of Order-in-Appeal No. 102/2010 dated 31.3.2010 passed by the Commissioner of Central Excise (Appeals), Madurai)
CCE, Tirunelveli Appellant
Vs.
M/s. Sterlite Industries (I) Ltd. Respondent
Appearance
Ms. Indira Sisupal, AC (AR) for the Appellant Shri G. Krishnamurthy, Advocate (AR) for the Respondent
CORAM
Honble Shri D.N. Panda, Judicial Member
Date of Hearing / Decision: 16.06.2015
Final Order No. 40633 / 2015
Honble High Court in the case of CCE, Salem Vs. Cheran Spinners Ltd. 2014 (33) STR 148 (Mad.) held that CEVAT credit lying in the account of an assessee can be utilized towards discharge of liability under GTA service availed. Prior to 18.4.2006 such facility was allowed. After that the law was amended removing the Explanation appearing under Rule 2(p) of the CENVAT Credit Rules, 2004. This Bench has already allowed the relief of setting off of CENVAT credit prior to 18.4.2006 against GTA service availed in the case of Iswari Spinning Mills Vs. CCE, Madurai 2011 (22) STR 549.
2. The second issue involved in the appeal is whether CENVAT credit can be utilized for the discharge of liability under reverse charge mechanism. But both sides agree that when the liability was not realizable, without specific provision in law from recipient of service as has been held by the Honble Supreme Court in the case of Union of India Vs. Indian National Shipowners Association 2010 (17) STR 157 (SC), there shall be no controversy at all on set off. Also when there is no liability in respect of the period prior to 18.4.2006, in respect of consulting engineering service availed from abroad, there is no further necessity to go into the details thereof.
3. In view of the above decision of the Honble Supreme Court, Madras High Court and Tribunal, where it is categorically held that prior to 18.4.2006 set off as above is permissible, Revenues appeal is dismissed.
(Dictated and pronounced in open court)
(D.N. Panda) Judicial Member
Rex
2
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