{"id":133132,"date":"2007-03-20T00:00:00","date_gmt":"2007-03-19T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/the-india-cements-ltd-vs-cce-on-20-march-2007"},"modified":"2018-10-19T11:30:39","modified_gmt":"2018-10-19T06:00:39","slug":"the-india-cements-ltd-vs-cce-on-20-march-2007","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/the-india-cements-ltd-vs-cce-on-20-march-2007","title":{"rendered":"The India Cements Ltd. vs Cce on 20 March, 2007"},"content":{"rendered":"<div class=\"docsource_main\">Customs, Excise and Gold Tribunal &#8211; Tamil Nadu<\/div>\n<div class=\"doc_title\">The India Cements Ltd. vs Cce on 20 March, 2007<\/div>\n<div class=\"doc_citations\">Equivalent citations: 2008 (223) ELT 78 Tri Chennai<\/div>\n<div class=\"doc_bench\">Bench: P Chacko, K T P.<\/div>\n<\/p>\n<pre><\/pre>\n<p>ORDER<\/p>\n<p>P.G. Chacko, Member (J)<\/p>\n<p>1. After examining the records and hearing both sides, we are of the view that the appeal itself requires to be finally disposed of at this stage. Accordingly, after dispensing with predeposit, we proceed to deal with the appeal.\n<\/p>\n<p>2. The appellants are manufacturers of cement. When they receive their inputs into their factory, they avail themselves of Goods Transport Agency&#8217;s Service (GTA Service, for short) and pay tax on such service. When they send out their final product from factory also, they avail similar service and pay tax thereon. During months of March, April &amp; July to December 2005 (8 months), they utilized credit of service tax paid on GTA Service availed in connection with receipt of inputs into their factory, in the payment of service tax on GTA Service which they availed in connection with removal of final product from their factory. This was objected to by the department, saying that the appellants had not provided any &#8220;output service&#8221; and had only received services during the above period and, therefore, they were not entitled to utilize input-service tax credit for payment of service tax on GTA Service availed in connection with removal of final product from their factory. On this basis, a show-cause notice was issued, which was contested. In adjudication of the dispute, learned Commissioner sustained the above objection of the department and confirmed demand of service tax to the extent of over Rs. 1.17 crores against the appellants under Section 73 of the Finance Act, 1994. He also imposed a penalty of equal amount on the assessee under Section 76 of the said Act. Hence the present appeal.\n<\/p>\n<p>3. After examining the provisions of the CENVAT Credit Rules, 2004, we come across an Explanation to the definition of &#8220;output service&#8221; under Rule 2(p), which reads as under:\n<\/p>\n<p>  Explanation. &#8211; For the removal of doubts it is hereby clarified that if a person liable for paying service tax does not provide any taxable service or does not manufacture final products, the service for which he is liable to pay service tax shall be deemed to be the output service.\n<\/p>\n<p>Admittedly, the appellants did not provide any taxable service, though they did manufacture an excisable product. Again, it is not in dispute that they were liable to pay service tax on GTA Service received by them in connection with clearance of their product from factory. But for the above Explanation, the GTA Service so received by the appellants would have been covered under the definition of &#8220;input service&#8221; under Rule 2(1) of the aforesaid Rules. By virtue of the Explanation, it shall be deemed to be &#8220;output service&#8221;. In other words, the appellants, while paying service tax on GTA Service availed in connection with removal of their final product from factory, were doing so on an &#8220;output service&#8221; and, therefore, they were entitled to utilize, for payment of service tax on such service, credit of the tax paid on the input GTA service availed by them in connection with receipt of inputs into their factory. Apparently, learned Commissioner lost sight of the above Explanation to the definition of &#8220;output service&#8221;.\n<\/p>\n<p>4. The demand of service tax and the penalty imposed are set aside and this appeal is allowed.\n<\/p>\n<p>(Dictated and pronounced in open court)<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Customs, Excise and Gold Tribunal &#8211; Tamil Nadu The India Cements Ltd. vs Cce on 20 March, 2007 Equivalent citations: 2008 (223) ELT 78 Tri Chennai Bench: P Chacko, K T P. ORDER P.G. Chacko, Member (J) 1. After examining the records and hearing both sides, we are of the view that the appeal itself [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-133132","post","type-post","status-publish","format-standard","hentry","category-judgements"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The India Cements Ltd. vs Cce on 20 March, 2007 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/the-india-cements-ltd-vs-cce-on-20-march-2007\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The India Cements Ltd. vs Cce on 20 March, 2007 - Free Judgements of Supreme Court &amp; 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