ISWARI SPINNING MILLS LTD. AND Vs. CCE

JUDGEMENT

(1.) AFTER examining the records and hearing both sides, I note that a common issue arises in all these matters and that the same is covered by decisions of this Tribunal. Hence, after dispensing with predeposit, I take up the appeals for final disposal.

(2.) THE appellants are manufacturers of cotton yarn. In terms of Rule 2(1)(d)(v) of the Service Tax Rules, 1994, they pay service tax on the Goods Transport Agency's (GTA) Service received by them for inward transportation of their inputs and outward transportation of their final product. During the period of dispute [January 2005 to March 2006], for payment of this tax, they availed CENVAT credit of the duty/service tax paid on inputs/capital goods or input service, as the case may be. This was objected to by the department. Eventually, the Commissioner (Appeals), in the impugned orders, demanded service tax equivalent to the above credit. Hence the present appeals.

(3.) LEARNED Counsel has submitted that the GTA service received by the appellants for inward and outward transportation of goods should be deemed to be an 'output service' by virtue of Explanation to the definition of output service given under Rule 2(p) of the Cenvat Credit Rules, 2004. Accordingly, it is submitted, the appellants were entitled to pay tax on such services by making use of CENVAT credit availed on inputs, capital goods and input -services. It is further pointed out that a similar issue was considered by this Bench in the case of two other assessees and the same was held in their favour. Learned Counsel has produced copies of the relevant final orders [No. 606/2007 dated 18.5.2007 in Appeal No. S/12/2007 of M/s. RRD Tex (P) Ltd. and No. 746 to 772/2007 dated 22.6.2007 in a batch of appeals of M/s. MMS Steels Ltd. and Ors.]. I have heard learned DR also.