AIA ENGINEERING LIMITED Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) M /s. Umiya PVC Pipe & Fitting Pvt. Limited is engaged in the manufacture of PVC rigid Pipes and fitting, Plastic water tank etc. The Appellant availed CENVAT credit of duty paid on motor vehicles at the rate of 50% available on capital goods in the month of September 2005, amounting to Rs. 2,66,264/ -. Intimation was given to the jurisdictional Superintendent of Central Excise who informed that Appellant is not eligible for the credit. However, the Appellant replied stating that since they are manufacturer and motor vehicles are capital goods and therefore they are eligible for the credit. A show cause notice was issued and proceedings were initiated thereafter. In the proceedings before lower authorities, CENVAT credit taken by the Appellant with interest has been demanded. Learned consultant appearing for the Appellants submitted that Appellant is to be treated as provider of Goods Transport Agency service in view of the provisions of Section 68(2) of Finance Act, 1994 (The act) and the definition of output service in CENVAT Credit Rules. In view of the provisions relating to definition of output service and provisions of Section 68(2) of the act, which empowers the Central Government to shift the liability to pay to the receiver of the service and Appellant is registered as a Goods Transport Agency service provider and is paying service tax for the Goods Transport Agency service received, would be eligible for the CENVAT credit of the duty paid on motor vehicles. Learned consultant also relied upon the decision of the Commissioner (Appeal) in the case of Super Spinning Mills Limited ' 209 (246) 789 (Commissioner Appeal)

(2.) LEARNED DR submits that the Appellant who is receiver of Goods Transport Agency service is treated as provider of output service for the limited purpose of paying service tax only and it does not entitle him for CENVAT credit of duty paid on motor vehicles, which is available to Goods Transport Agency service providers only.

(3.) NOWHERE the section provides that receiver who is liable to pay tax is to be treated as deemed service provider. The reliance of the Appellant on the definition of provider of taxable service available in Rule 2 (r) of Central Credit Rules, 2004 is also mis -placed in view of the fact that according to this rule 'provider of taxable service' includes a 'person liable for paying service tax'. This does not mean that a person liable to pay service tax is to be deemed as provider of taxable service. This only supports the view taken by the lower authorities that person liable for paying service tax is included in the category of provider of taxable service. Rule 2 (p) of Central Excise Rules defines output service. Learned consultant stressed upon the point that this Rule was amended on 01.3.2008 to exclude the Goods Transport Agency service from the definition of output service and therefore, prior to 01.3.2008, which is the period in the impugned proceedings, credit was admissible. I do not find this amendment helps the Appellant in any manner. After 01.03.2008, Goods Transport Agency service provider would not be eligible for CENVAT credit at all. The definition of provider of taxable service has been introduced for the limited purpose of enabling a person paying service as receiver to avail CENVAT credit of service tax paid by him if he is otherwise eligible.