2015 (10) TMI 1850 - AT - Service Tax

CENVAT Credit - duty paying document - service tax under reverse charge availed as cenvat credit on the basis of TR-6 challan - Business Auxiliary Services - Held that - Issue involved in this case is fully covered by the decision of this Tribunal in the case of JSW Steels Ltd. (2008 (9) TMI 74 - CESTAT, CHENNAI ). I also find that as the Credit was taken by the assessee on the basis of TR-6 challan, Explanation to Rule 9 (1) (b) of Cenvat Credit Rules, 2004 is not applicable in the present case. Therefore, I hold that there is no infirmity in the impugned order - Decided against Revenue.

Summary

Issues:
1. Disallowance of CENVAT Credit under Rule 9(1)(b) of Cenvat Credit Rules, 2004.
2. Applicability of Rule 9(b) to input services.
3. Interpretation of legal provisions regarding CENVAT Credit on service tax.

Analysis:

1. The appeal was filed by the Revenue against the Order-in-Appeal that set aside the Order-in-Original disallowing CENVAT Credit of Rs. 15,87,659/- due to non-payment of service tax to foreign agents. The issue revolved around Rule 9(1)(b) of the Cenvat Credit Rules, 2004, which restricts credit in cases of non-levy or short levy due to fraud, collusion, or contravention of excise or customs laws to evade duty.

2. The Respondent contended that Rule 9(b) did not apply as they availed CENVAT Credit on TR-6 challans, not supplementary invoices, and that the rule pertained to inputs and capital goods, not input services. They argued that Rule 9(b) did not restrict credit on input services for service tax but only for contraventions under specific acts. Citing a Tribunal decision, they emphasized that the rule did not apply to service tax at all, supporting the legality of their CENVAT Credit claim.

3. The Tribunal, considering the arguments, referred to a previous judgment involving JSW Steels Ltd. and held that Rule 9(1)(b) did not apply in this case as the credit was based on TR-6 challans, not falling under the Explanation to the rule. Consequently, the Tribunal upheld the Order-in-Appeal, dismissing the Revenue's appeal. The decision was based on the interpretation that the issue was covered by the precedent and the credit availed by the assessee was deemed proper under the law.

This detailed analysis highlights the legal intricacies and interpretations involved in the judgment, addressing the disallowance of CENVAT Credit under specific rules and the application of legal provisions to service tax transactions.