{"id":99032,"date":"2008-01-18T00:00:00","date_gmt":"2008-01-17T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/rajshree-sugars-and-chemicals-vs-cce-st-on-18-january-2008"},"modified":"2018-12-24T06:52:54","modified_gmt":"2018-12-24T01:22:54","slug":"rajshree-sugars-and-chemicals-vs-cce-st-on-18-january-2008","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/rajshree-sugars-and-chemicals-vs-cce-st-on-18-january-2008","title":{"rendered":"Rajshree Sugars And Chemicals &#8230; vs Cce (St) on 18 January, 2008"},"content":{"rendered":"<div class=\"docsource_main\">Customs, Excise and Gold Tribunal &#8211; Tamil Nadu<\/div>\n<div class=\"doc_title\">Rajshree Sugars And Chemicals &#8230; vs Cce (St) on 18 January, 2008<\/div>\n<div class=\"doc_citations\">Equivalent citations: 2008 11 S T R 67<\/div>\n<div class=\"doc_bench\">Bench: K T P.<\/div>\n<\/p>\n<pre><\/pre>\n<p>ORDER<\/p>\n<p>P. Karthikeyan, Member (T)<\/p>\n<p>1. M\/s. Rajshree Sugars &amp; Chemicals Ltd., Viluppuram, has filed this stay application. They manufacture sugar and molasses and operate under Cenvat Scheme. They pay service tax under GTA service on freight for transport of materials into the factory and for transport of final products to their buyers. They utilized cenvat credit for payment of service tax on freight incurred for transport of materials into the factory during the period 01\/01\/05 to 30\/09\/05. The original authority demanded service tax and education cess totaling Rs. 8,85,380\/- and demanded interest thereon. He also imposed penalties on the assessee under various provisions of the Finance Act and Cenvat Credit Rules, 2004 (CCR). In the impugned order the Commissioner affirmed the order of the original authority. The Commissioner held that the assessee having paid service tax on freight for movement of materials into and out of the factory, they were a provider of output service. As a provider of output service, the assessee was not entitled to utilize cenvat credit under Rule 3(4) of CCR. The said rule provided for utilizing cenvat credit for payment of duty on final products or output service.\n<\/p>\n<p>2. Moving the application, the Ld. Consultant for the appellants relies on the ratio of the decisions of the Tribunal in R.R.D. Tex Pvt. Ltd. v. CCE, Salem reported in 2007 (8) STR 186 (Tri.-Chen.) and India Cements Ltd. v. CCE Salem reported in 2007 (7) STR 569 (Tri.-Chen.), wherein the Tribunal, relying on the Explanation to Rule 2(p) of CCR had decided that by virtue of the Explanation, the GTA service for which the assessee paid, service tax was &#8220;output service&#8221;. Accordingly, it was held that cenvat credit could not be utilized for discharging GTA service availed by them in connection with the receipt of inputs into the factory.\n<\/p>\n<p>3. Ld. SDR reiterates the findings in the impugned order.\n<\/p>\n<p>4. I have carefully considered the records of he case and the submissions by both sides. The output service is defined under Rule 2(p) is as follows:\n<\/p>\n<p>Output service&#8221; means any taxable service provided by the provider of taxable service, to a customer, client, subscriber, policy-holder or any other person, as the case may be, and the expressions &#8220;provider&#8221; and &#8220;provided&#8221; shall be construed accordingly.\n<\/p>\n<p>Explanation: 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>In terms of the Explanation which existed on the statute during the material time, the inward transport is a GTA service and an output service. For payment of service tax on this output service, cenvat credit earned by the assessee can be utilized validly. This is also the ratio of the decisions cited by the Consultant. That is what precisely the applicant has done. Therefore, the appellants &#8216;have made out a prima facie case against the impugned demand and penalties. Accordingly, I order that there shall be waiver of predeposit and stay of recovery of the service tax, interest and penalties in terms of the impugned order till the final disposal of the appeal.\n<\/p>\n<p>(Operative portion of the Order pronounced is the open Court on 18.01.08)<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Customs, Excise and Gold Tribunal &#8211; Tamil Nadu Rajshree Sugars And Chemicals &#8230; vs Cce (St) on 18 January, 2008 Equivalent citations: 2008 11 S T R 67 Bench: K T P. ORDER P. Karthikeyan, Member (T) 1. M\/s. Rajshree Sugars &amp; Chemicals Ltd., Viluppuram, has filed this stay application. They manufacture sugar and molasses [&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-99032","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>Rajshree Sugars And Chemicals ... vs Cce (St) on 18 January, 2008 - 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\/rajshree-sugars-and-chemicals-vs-cce-st-on-18-january-2008\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Rajshree Sugars And Chemicals ... vs Cce (St) on 18 January, 2008 - Free Judgements of Supreme Court &amp; 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