9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (6) TMI 168 - AT - Service TaxWrongful utilization of CENVAT Credit in discharging the service tax liability under Reverse Charge Mechanism - availing inadmissible CENVAT Credit on various input services. Whether service tax paid by the appellant on tax on Reverse Charge Mechanism basis by utilizing CENVAT Credit for the period prior to 01.04.2011 is valid? - HELD THAT - This Tribunal in the HDFC s case 2019 (6) TMI 74 - CESTAT MUMBAI has observed that for the period prior to the amendment to the relevant Rules, the eligibility to utilize CENVAT Credit in discharging service tax on Reverse Charge Mechanism cannot be questioned and accordingly, held to be admissible - there are no merit in the impugned order confirming demand of Rs.14,36,72,226/- with interest and penalty, hence, accordingly set aside. Whether CENVAT Credit on various input services claimed to have been used in providing output services amounting to Rs.25,99,085/- is admissible? - HELD THAT - The appellant submits that all these input services availed credit on these services prior to 01.04.2011 and held to be admissible under various judgments of this Tribunal. He fairly submits that since the ld. Commissioner has not recorded findings on principle of admissibility and substantial verification of the documents on which credit has been taken, the matter may be remanded to the ld. Commissioner for verification. The ld. AR has no objection - the matter is remanded to the adjudicating authority for the limited purpose of verification of the admissibility of CENVAT Credit to the extent of Rs.25,99,085/-. The appellant are at liberty to file relevant documents in support of the claim of admissibility of CENVAT Credit. The impugned order is modified to the extent of setting aside the demand of service tax of Rs.14,36,72,226/- with interest and penalty, and for verification of the admissibility of CENVAT Credit, it is remanded to the adjudicating authority. Since the matter is quite old, the ld. adjudicating authority as far as practicable decide the same within three months from the date of communication of this order. Appeal allowed in part and part matter on remand.
Issues:
1. Validity of service tax paid by the appellant on Reverse Charge Mechanism utilizing CENVAT Credit. 2. Admissibility of CENVAT Credit on various input services amounting to Rs.25,99,085. Analysis: Issue 1: The appeal challenged an Order-in-Original regarding the appellant's utilization of CENVAT Credit for service tax under Reverse Charge Mechanism. The appellant provided 'Information Technology Software Service', 'Management Consultants Service', and 'Business Auxiliary Service'. The demand was for Rs.14,36,72,226/- service tax and Rs.2,60,66,700/- CENVAT Credit. The appellant cited judicial pronouncements to support their case, emphasizing the eligibility to use CENVAT Credit for service tax under Reverse Charge Mechanism. The Tribunal referred to previous judgments, including HDFC Bank Ltd vs. CCE, Thane-II, and held that the appellant, as a deemed service provider, could utilize CENVAT Credit for service tax liability. The Tribunal set aside the demand of Rs.14,36,72,226/- with interest and penalty based on established principles and upheld by Hon'ble Karnataka High Court. Issue 2: Regarding the admissibility of CENVAT Credit on input services like 'Architect Services', 'Clubs & Association Services', and others totaling Rs.25,99,085, the appellant contested the Commissioner's disallowance without detailed findings. The appellant requested a remand for verification of admissibility. The Tribunal remanded the matter for verification of CENVAT Credit admissibility to the adjudicating authority, allowing the appellant to submit relevant documents. The impugned order was modified to set aside the service tax demand and remand for verification of CENVAT Credit admissibility. The adjudicating authority was directed to decide the matter within three months from the date of the order. This judgment provides clarity on the utilization of CENVAT Credit for service tax under Reverse Charge Mechanism and emphasizes the importance of detailed findings in determining the admissibility of CENVAT Credit on input services.
|
