2015 (10) TMI 1575 - AT - Service Tax

Denial of CENVAT credit - construction services and manpower recruitment agency service - Held that - lower authorities should have got the details verified from the concerned Range of the service provider, if in doubt, instead of holding against the appellant. As regards the surrendering of licence by the Radhika Engineering, the service provider, I find that the service tax registration certificate was surrendered on 16.04.2007 for the services rendered on 2005-06 after service tax liability has been discharged. In my view if the service tax liability has not been discharged by the registered unit, Revenue will not accept surrendering the registration certificate. In the absence of any contrary evidence, I have to hold that the service tax paid by the service provider during 2005-06, though the appellant has availed CENVAT credit belatedly which is well within the provisions of CENVAT Credit Rules, 2004. - Decided in favour of assessee.

Summary

Issues:
Denial of CENVAT credit on service tax paid by service provider for construction services and manpower recruitment agency service.

Analysis:
The appeal challenged the denial of CENVAT credit to the appellant based on service tax paid by the service provider. The Revenue contended that the appellant wrongly availed credit for 2007-08 and 2008-09 on invoices from Radhika Engineering, which had surrendered its license. The appellant argued that Radhika Engineering had paid service tax for 2005-06 as per their tax returns. The main issue was the misunderstanding of CENVAT Credit Rules by lower authorities, as there is no time limit for availing credit on service tax paid by the service provider during the relevant period.

The judge found that the lower authorities misinterpreted the rules and failed to verify details from the service provider's Range before ruling against the appellant. Despite Radhika Engineering surrendering its license in 2007, the judge noted that the service tax liability for 2005-06 had been discharged. The judge emphasized that the appellant availed CENVAT credit within the rules, considering the services were rendered and invoices raised during 2005-06. The surrender of the registration certificate did not affect the validity of the credit availed by the appellant.

In conclusion, the judge set aside the previous order and allowed the appeal, highlighting that the appellant's delayed availing of CENVAT credit was still within the provisions of the CENVAT Credit Rules, 2004. The decision was based on the correct interpretation of the rules and the evidence provided by the appellant regarding the payment of service tax by the service provider for the relevant period.