PRAKASH INDUSTRIES LTD. Vs. COMMISSIONER OF C. EX., RAIPUR
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
PRAKASH INDUSTRIES LTD.
Commissioner Of C. Ex., Raipur
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R.K.SINGH,MEMBER (T) -
(1.)Appeal has been filed against order -in -original dated 2 -3 -2009 in terms of which Service tax demand of Rs. 6,75,96,097/ - was confirmed along with interest and penalties. In addition Cenvat credit amounting to Rs. 1,17,75,703/ - was held to be wrongly taken and utilised and was therefore disallowed and ordered to be recovered along with interest and penalties. The appellant is a manufacturer of iron and steel products and recipient of Goods Transport Agency Service. It paid Service tax on GTA service by utilising Cenvat credit and took the credit thereof on the basis of its out invoices issued in respect of the Service tax on GTA service so paid by it. The adjudicating authority held that it was not a GTA service provider and therefore Service tax under reverse charge mechanism was required to be paid in cash and also that it had irregularly taken credit of Service tax paid on GTA service on the strength of its own invoices. On these grounds the Cenvat credit of Rs. 1,17,75,703/ - taken on the basis of its own invoices in relation to Service tax so paid on GTA services was disallowed and ordered to be recovered along with interest and penalties. Demand of Rs. 6,75,96,097/ - was confirmed on the ground that the appellant had wrongly availed of the benefit of Notification No. , dated 3 -12 -2004 and thereby paid Service tax on 25% of the amount paid for GTA service even when there were no declarations from the transport agencies to the effect that they (i.e. the transport agencies) had not availed of the credit of duty paid on inputs and capital goods and had also not availed of the benefit under Notification No. 12/2003 -S.T. The transport documents did not bear any such declaration of the service providers (goods transport agencies) and that only a stamp to that effect was put on the goods transport agencies invoices. The adjudicating authority observed that the said stamp was put subsequently and it was an identical stamp on all the invoices although these invoices pertained to several goods transport agencies which showed that the said stamp was not put by the goods transport agencies.
(2.)(i) The appellant has contended that under the reverse charge mechanism for the purpose of paying Service tax under GTA service, it became the service provider because as per Rule 2(r) of Cenvat Credit Rules, 2004 "provider of taxable service includes the person liable to Service tax", and under Rule 2(p) of the said Rules, "output service means taxable service provided by the provider of taxable service". It stated that as it was deemed to be a provider of GTA service the Service tax thereon was rightly paid by utilisation of Cenvat credit. It cited following judgments in support of its contention:
(i) CCE v/s. Nahar Industrial Enterprises -, 2012 (25) S.T.R. 129 (P & H).
(ii) Panchmahal Steel v/s. CCE -, 2014 (34) S.T.R. 351 (LB).
(iii) CCE v/s. Cheran Spinners Ltd. -, 2014 (33) S.T.R. 148 (Mad.).
As GTA service was its input service, the credit of Service tax paid on GTA service was rightly taken, contended the appellant.
(ii) As regards the demand of Rs. 6,75,96,097/ - the appellant has contended that the transporters were not even registered, a fact which has been noted in the impugned order and therefore the question of their availment of Cenvat credit or the benefit of Notification No. 12/2003 -S.T. does not arise. Further, the requirement of declaration on the invoices was introduced by CBEC's executive instructions and as a matter of abundant caution it had put the rubber stamp to that effect with the consent of the goods transport agencies which had issued the invoices. It stated that it has also since taken independent declarations from the transport agencies to the effect that they had not availed of Cenvat credit or the benefit of Notification No. 12/2003 -S.T. and also that they had given their consent to put rubber stamps on their invoices as mentioned above. The appellant cited following judgments in support of its contention:
(i) Venkateshwara Distributors v/s. CCE -, 2013 (31) S.T.R. 469 (Tri. -Del.).
(ii) Yash Paper Ltd. v/s. CCE -, 2014 (35) S.T.R. 407 (Tri. -Del.).
(iv) Micromatic Grinding Tech. Ltd. v/s. CCE -, 2012 (25) S.T.R. 355 (Tri. -Del.).
(3.)The ld. DR on the other hand contended that merely because the appellant was required to pay Service tax under reverse charge mechanism does not make it a provider of GTA service and therefore Cenvat credit cannot be utilised for paying Service tax thereon. He further stated that the declaration regarding non -availment of Cenvat credit or the benefit of Notification No. 12/2003 -S.T. by Goods Transport Agencies was not available on the invoices at the time of receipt of service and that the stamp to that effect was put on the invoices only subsequently and therefore the benefit of Notification No. 12/2003 -S.T. cannot be extended on the basis of such declaration subsequently made. He added that the appellant had intentionally prepared bills in accordance with Rule 4(a) of Service Tax Rules, 1994 in respect of Service tax paid on GTA service so as to avail of the Cenvat credit thereof although it was not the provider of the output service (i.e. GTA service). Putting of rubber -stamp -declaration on the invoices subsequent to the receipt of service also shows misstatement on their part, thus argued the ld. DR.
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