2015 (7) TMI 307 - AT - Service Tax

Input services - cenvat credit - service tax paid on any service which was not taxable - Held that - Issue involved in the present case has been dealt by this Tribunal and held that cenvat credit in respect of services of certification of pollution level is admissible, even though the service in the hands of service provider is not taxable but the service tax was admittedly paid by the service provider. - impugned order is not sustainable and hence the same is set aside - Decision in the case of assessee s own previous cases 2010 (12) TMI 1145 - CESTAT MUMBAI and 2010 (12) TMI 100 - CESTAT, MUMBAI followed - Decided in favour of assessee.

Summary

Issues:
Admissibility of cenvat credit for service of certification of pollution level.

Analysis:
The appeal challenged the order-in-appeal upholding the denial of cenvat credit for a service of certification of pollution level, which the lower authority deemed non-taxable under Section 65 of the Finance Act. The appellant argued that despite the service being non-taxable, as the service provider paid service tax and the Revenue accepted it without dispute, cenvat credit should not be denied. Citing previous Tribunal judgments in the appellant's favor, the appellant contended that the issue had attained finality in their favor.

The Tribunal examined the submissions and noted that in previous cases involving the same issue, cenvat credit had been allowed. The Tribunal referenced specific judgments where it was held that if a service provider paid service tax on a non-taxable service, the recipient could still claim cenvat credit. It emphasized that the decision on whether a service is taxable rests with the service provider, and as long as service tax was paid, the recipient could avail cenvat credit. Therefore, the Tribunal found no merit in the impugned order and allowed the appeal with consequential relief.

The Tribunal further discussed another case where the denial of CENVAT credit on certain input services, including inspection and certification of pollution level, was overturned. It reiterated that if services were tax-paid and used as input services, the recipient had the right to claim CENVAT credit. As the services in question were not disputed to be covered by the definition of 'input service,' the Tribunal held that the appellant was entitled to the credit under the CENVAT Credit Rules. Consequently, the impugned order was set aside, and the appeal was allowed.

In conclusion, the Tribunal established that cenvat credit for services of certification of pollution level is admissible, even if the service was non-taxable in the hands of the service provider but service tax was paid. Based on the precedents and legal principles discussed, the Tribunal found the impugned order unsustainable and set it aside, ultimately allowing the appeal.