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2014 (9) TMI 817 - AT - Service TaxCENVAT Credit of Service Tax paid - Port services - Penalty u/s 78 - Held that - Appellant was entitled to take credit of the input service on or after 14.5.2003. Further, the appellant draws my attention to para 1 of the show-cause notice wherein it is admitted fact that the appellant applied for Service Tax Registration on 9.1.2004 and they were granted registration vide certificate dated 12.1.2004. Further argument by the appellant is that, as an output service provider duly recognized by the Service Tax Department, it was entitled to take credit of tax paid on input service from the date of registration as well as prior to date of registration as held by this Tribunal in Imagination Technologies India Pvt. Ltd. Vs. Commissioner of Central Excise, Pune-III 2011 (4) TMI 406 - CESTAT, MUMBAI . Admitted case of the Revenue that the appellant is a output service provider, in view of the certificate of registration granted dated 11.1.2004, which has not been cancelled thereafter, I hold that the appellant has taken Service Tax credit for input services in accordance with law and have also utilized the same in accordance with law under the provisions of Rule 11 of the Cenvat Credit Rules, 2004. On the ground of limitation also I hold in favour of the appellant in view of the proper declaration made before the Revenue by regularly filing of returns. In this view of the matter, the impugned order is set aside - Decided in favour of assessee.
Issues:
1. Disallowance of CENVAT Credit for input services availed by the appellant. 2. Eligibility of the appellant as an output service provider to take CENVAT Credit. 3. Utilization of input service tax with the output tax under Rule 11 of the Cenvat Credit Rules, 2004. 4. Grounds of limitation raised by the appellant regarding declaration of credit in returns. 5. Appeal against the Order-in-Appeal No. YDB/82/RGD/2011 dated 31.1.2011. Issue 1: Disallowance of CENVAT Credit for input services availed by the appellant: The appellant, a manufacturer of Sponge Iron, imported certain inputs for manufacturing through Port and availed CENVAT Credit of Service Tax paid on the port services. However, a show-cause notice was issued proposing to disallow the CENVAT Credit availed by the appellant for the input services amounting to a specific sum during a particular period. The appellant contested the notice on both merits and limitation grounds. The Order-in-Original confirmed the disallowance of CENVAT Credit along with a penalty. The Commissioner (Appeals) upheld the disallowance, stating that the appellant was not eligible to take CENVAT Credit of the input services as they were not providing port services during the relevant period. Issue 2: Eligibility of the appellant as an output service provider to take CENVAT Credit: The appellant argued that they were entitled to take credit of input service from a specific date as per Rule 3 of the Service Tax Credit Rules, 2002. They contended that as an output service provider recognized by the Service Tax Department, they were eligible to take credit of tax paid on input services from the date of registration. The appellant relied on a tribunal ruling to support their claim. The Tribunal found that the appellant, being an output service provider, was entitled to take Service Tax credit for input services in accordance with the law. Issue 3: Utilization of input service tax with the output tax under Rule 11 of the Cenvat Credit Rules, 2004: The appellant argued that they were entitled to make adjustments of the input service tax with the output tax from excise duty under Rule 11 of the Cenvat Credit Rules, 2004. The Tribunal agreed with the appellant's contention and held that the appellant had utilized the Service Tax credit for input services in accordance with the law. Issue 4: Grounds of limitation raised by the appellant regarding declaration of credit in returns: The appellant raised a ground of limitation, stating that they had regularly declared the taking of credit in their returns filed with the department. They argued that as the information was regularly supplied in the normal course of business, no allegation of suppression should be attracted to them. The Tribunal, considering the regular filing of returns indicating the total amount of credit availed, held in favor of the appellant on the ground of limitation. Issue 5: Appeal against the Order-in-Appeal No. YDB/82/RGD/2011 dated 31.1.2011: The Tribunal, after considering the contentions of both parties, found in favor of the appellant. It held that the appellant had taken Service Tax credit for input services in accordance with the law and had also utilized the same in accordance with the provisions of Rule 11 of the Cenvat Credit Rules, 2004. The impugned order was set aside, and the appeal of the appellant was allowed with consequential relief, if any, in accordance with the law. This detailed analysis of the judgment highlights the key issues involved and the Tribunal's findings on each issue, providing a comprehensive understanding of the legal aspects addressed in the case.
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