Per Justice R.K. Abichandani : The Revenue has challenged the order of the Commissioner (Appeals) setting-aside the order-in-original by which recovery of Service Tax of Rs. 5,55,942/- was ordered and penalty imposed of the like amount under Rule 15 of the Cenvat Credit Rules, 2004.

2. The respondent was manufacturing cotton yarn/fabrics and availing facility of Cenvat Credit. According to the Revenue, the liability in respect of 'Good Transport Agency' services was required to be discharged by the respondent by cash, because recipient of such service was liable to pay the tax. The liability to pay Service Tax, in respect of GTA services received, could not be discharged by utilizing Cenvat Credit of manufacturing activity. Show cause notice was, therefore, issued for recovery of Service Tax with interest and proposing penalty.

3. According to the respondent-assessee, the recipient was a deemed service provider for the purposes of GTA services. It was contended that, as per the explanation to Rule 2(p) of the Cenvat Credit Rules, 2004 read with Section 68(2), the noticee was liable to pay Service Tax for the GTA services and, therefore, the said input service was a deemed output