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Judgment
Heard both sides. The only issue involved in this case is whether the service tax on GTA service can be paid by the appellants by utilizing the
cenvat credit. Adjudicating authority as well as the first appellate authority held that the Service Tax on GTA service in terms of Rule 2(1)(d)(v) of
Service Tax Rules was required to be paid in cash on the ground that the cenvat credit was taken in respect of inputs, capital goods and inputs
services and none of these inputs capital goods or input services were used for rendering the goods transport agency service.
We have perused the Cenvat Credit Rules. In terms of Rule 3(4) of Cenvat Credit Rules, 2004, Cenvat Credit can be used for payment of service
tax on any output service. Any elaborate discussion on this issue is however not necessary in view of the consistent judicial pronouncements in favour
of the assessees in this regard. In the case of Shree Rajasthan Syntex Ltd. Vs. CCE, Jaipur - 2011 (24) STR 670 (Tri. Del.) the Hon’ble
CESTAT held that prior to the date of Notification No.10/2008-CE (NT) there was no restriction for utilization of cenvat credit by manufacturing unit
towards payment of service tax as output service provider on GTA service received. Similar view was held in the case of CCE vs. Auro Spinning
Mills - 2012 (26) STR 413 (HP) which held that manufacturer can take benefit of cenvat credit which it had obtained on the manufacturing side for
discharging the service tax liability on account of goods transport agency service. CESTAT vide Final Order No.55931/2013 dated 03.04.2013 in the
case of M/s. Shree Fats & Proteins Pvt. Ltd. Vs. CCE, Jaipur-I has noted as under:-
“It was further held that prior to the Notification dated 01.03 2008, the issue stands decided in favour of the appellant by several
judgments and Cenvat credit could be utilised towards service tax in respect of services received from GTA, in view of the deeming fiction in
Rule 2(r) whereunder the service recipient is defined to be different service provider, if liable to service tax.â€
As the period involved in this case is March, 2005 - March, 2006 the aforesaid decisions squarely covered the issue in favour of the appellants.
Accordingly, we waive the pre-deposit and allow the appeal.