CENVAT credit can be utilized for payment of Service Tax under Reverse Charge

PrintPDF

CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,

SOUTH ZONAL BENCH, AT BANGALORE.

M/s GE India Industrial Pvt. Ltd.

Versus

The Commissioner of Service Tax, Bangalore

Appeal No: ST/2134 OF 2010, Date of Order: 23.01.2013,

 

Issue – Whether a person who is not a actual service provider, but discharges the service tax liability on the Taxable Services, under Section 68(2) of Finance Act, 1994, as a deemed service provider, is entitled to avail the CENVAT credit on inputs/input services/capital goods for payment of GTA service tax, even if he is not using such inputs/input services/capital goods for providing taxable services by virtue of deeming legal fiction?

Held – In view of paragraph 2.4.2 of CBEC’s Excise Manual of Supplementary Instructions, the Hon’ble High Court answered the above question in the affirmative in favour of the assessee. The decision was rendered on 06.5.2010, i.e. long after a similar question was referred by a regular Bench of this Tribunal to Larger Bench in the case of Panchmahal Steel Ltd. (supra). Obviously, the referring Bench did not have the advantage of considering the High Court’s decision. At the present stage, one has to follow the view taken by the Hon’ble High Court, in the absence of any binding judicial precedent to the contra. Accordingly, it is held that the appellant was, during the material period, entitled to take CENVAT credit on input services and utilise the same for payment of service tax on the GTA service. Consequently, the impugned demands are liable to be set aside. In the result, the impugned order is set aside and this appeal is allowed.