2018 (8) TMI 487 - AT - Service Tax

CENVAT Credit - duty paying documents - case of Revenue is that the appellant is not entitled to avail Cenvat Credit on the basis of the Debit Notes as the DHS Mumbai cannot be said to have an office or any other premises of DHS- Kolkata and they cannot be considered as an Input Service Distributor as it failed to satisfy the definition as provided in Rule 2(m) of the Cenvat Credit Rules, 2004. Held that - There is no dispute that the DHS- Mumbai had issued the Debit Notes towards the proportionate share in the Subscription Fee paid to Deloitte Global along with Service Tax of the appellant DHS-Kolkata - Tribunal in the case of Amra Raja Power Systems Limited Vs. Commissioner of Customs & Central Excise, Tirupati 2015 (12) TMI 1558 - CESTAT HYDERABAD held that when Service Tax has been duly discharged by the service provider, service recipient cannot be denied credit of Service Tax borne by him. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Cenvat Credit eligibility based on Debit Notes issued by service provider, Interpretation of Input Service Distributor definition under Cenvat Credit Rules, 2004.

Analysis:
The appeal was filed against Order-in-Appeal No.227/S.Tax.I/KOL/2017 dated 27.09.2017, where the appellant, a member of an association, availed Cenvat Credit based on Debit Notes issued by the service provider. The Revenue contended that the appellant was not entitled to avail Cenvat Credit as the service provider did not meet the Input Service Distributor definition under Rule 2(m) of the Cenvat Credit Rules, 2004.

Upon examining the case, it was found that the service provider had issued Debit Notes towards the proportionate share of the Subscription Fee paid, including Service Tax. Referring to a previous Tribunal decision, it was highlighted that when Service Tax is duly discharged by the service provider, the service recipient should not be denied credit for the Service Tax borne by them. The decision emphasized that if the department has accepted tax on services provided, they cannot then deny credit by claiming no services were rendered.

Based on the above discussion and the precedent cited, the impugned Order was set aside, and the appeal filed by the appellant was allowed. The Tribunal's decision was in favor of the appellant, emphasizing the importance of recognizing the credit due when Service Tax has been duly discharged by the service provider.