2015 (12) TMI 270 - AT - Service Tax

Demand of service tax - Denial of CENVAT Credit - landlord had taken the registration subsequently - Held that - An assessee who has paid the service tax to the service provider, is entitled to avail the credit of the same, without finding whether such service tax paid by him to the service provider stands further deposited by him to the exchequer. It is neither possible nor practicable for any service recipient to verify the fact of payment of service tax by the service provider. If the Revenue is of the view that the service provider has not deposited the service tax collected by him from his customers, the remedy lies at the end of the service provider and not at the end of the service recipient. Apart from that, I find that in the present case, the Revenue has not made any verifications at the end of the service provider to find out as to whether the service tax has actually been deposited by them or not. There is neither any allegation much less any evidence to that effect. - no justifiable reasons to deny the credit of the service tax to the appellant. Accordingly, the impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
1. Extension of stay application
2. Denial of credit for service tax paid to landlord
3. Denial of credit for service tax due to missing registration number on invoices

Extension of Stay Application:
The judgment dismisses the miscellaneous application for extension of stay as infructuous since the appeal itself is being taken up for disposal, indicating that the need for extension no longer exists.

Denial of Credit for Service Tax Paid to Landlord:
The appellant's credit of &8377; 6,31,407/- for service tax paid to the landlord was denied because the landlord obtained registration after the tax payment, leading to the denial of credit. However, it was explained that the landlord later raised debit notes for the service tax, which the appellant paid after registration. The judgment emphasizes that an assessee who has paid service tax to the service provider is entitled to avail the credit, regardless of whether the service provider further deposited the tax to the exchequer. The Revenue did not verify if the service tax was actually deposited by the service provider, and without evidence or allegations, the denial of credit was deemed unjustified.

Denial of Credit Due to Missing Registration Number on Invoices:
Another amount of &8377; 83,044/- was denied to the appellant because the invoices from the service provider did not contain the registration number. Despite this, there were no allegations of non-payment of service tax by the appellant to either the landlord or the service provider. The judgment highlights that it is impractical for a service recipient to verify the service provider's tax payment, and the responsibility lies with the service provider. Since the Revenue did not verify if the service tax was deposited by the service provider, the denial of credit based on missing registration numbers was deemed unjustified. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief, granting the appellant the credit for the service tax amount.