2016 (9) TMI 236 - AT - Service Tax

CENVAT credit registration of parties under service tax Held that - Registration is mere technical formality to bring the taxpayer to the fold of law without curtailment of the right of the taxpayer to be subject to other provisions of law which grants benefit. The input services have been utilized by the appellant in providing output service and in absence of any contrary finding, there cannot be denial of CENVAT credit of the service tax paid on input service CENVAT credit is admissible to the extent verifiable from records appeal allowed decided partly in favor of appellant.

Summary

Issues:
1. Verification of service tax payment by the appellant
2. Admissibility of CENVAT credit for service tax paid
3. Registration status of the parties during the material period
4. Denial of CENVAT credit based on registration status
5. Imposition of penalty for breach of law

Analysis:
1. The judgment addresses the first issue by acknowledging that the Revenue verified the service tax payment by the appellant, as communicated in a letter to the Tribunal. This verification forms the basis for the appellant's claim for CENVAT credit for the service tax paid.

2. Regarding the admissibility of CENVAT credit, the appellant contends that they should be eligible for the credit since the service tax payment has been verified by the Revenue. The Tribunal agrees and allows the appellant to claim the CENVAT credit to the extent of the service tax paid, which is verifiable from records.

3. The Revenue's contention revolves around the registration status of the parties during the material period. However, the Tribunal emphasizes that registration is a technical formality and does not negate the right of the taxpayer to claim benefits under the law if the input services have been utilized for providing output services.

4. Despite the Revenue's argument about the parties not being registered during the material period, the Tribunal clarifies that this should not lead to the denial of CENVAT credit for the service tax paid on input services. The Tribunal highlights that registration is essential for compliance but should not hinder the taxpayer from enjoying benefits under the law.

5. Lastly, the Tribunal rules that there shall be no penalty imposed as there was no noticeable breach of law. The judgment concludes by partially allowing the appeal, indicating the extent to which the appellant can claim CENVAT credit based on verifiable records.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT CHENNAI highlights the key issues addressed, the arguments presented by both parties, and the Tribunal's findings and conclusions on each aspect of the case.