2016 (12) TMI 905 - AT - Central Excise

Cenvat credit - Notification No.30/2012/ST- dated 20.06.2012 - Held that - It is an admitted fact on record that the service provider is registered with the service tax department and has discharged the service tax liability on the entire value of taxable service, instead of 45% as prescribed under Notification No.30/2012/ST- dated 20.06.2012 - Since the appellant herein has taken the service tax paid by the service provider on the basis of invoices raised by him - appeal allowed - decided in favor of appellant.

Summary

Issues: Availment of entire amount of service tax as cenvat credit instead of the prescribed rate of 45%.

Analysis:
The issue in this case revolves around the appellant's decision to avail the entire amount of service tax as cenvat credit, contrary to the prescribed rate of 45%. The appellant's advocate argued that the service provider had paid 100% service tax, which was accepted by the jurisdictional service tax authorities. Therefore, the central excise authorities should not deny the appellant the right to take cenvat credit in the recipient unit. On the other hand, the respondent's representative reiterated the findings of the impugned order.

It is established on record that the service provider is registered with the service tax department and has paid the service tax on the full value of taxable service, not just the prescribed 45%. The jurisdictional service tax authorities have acknowledged this payment and retained the amount as Government Revenue. The appellant, relying on the invoices from the service provider, has claimed cenvat credit for the service tax paid. The tribunal opined that as the service tax payment by the provider was accepted and retained by the authorities, the appellant's availing of cenvat credit aligns with the cenvat statute. Consequently, the tribunal found no merit in the impugned order and ruled in favor of the appellant.

In conclusion, the tribunal's decision favored the appellant, allowing them to avail the entire amount of service tax as cenvat credit, despite it exceeding the prescribed rate of 45%. The acceptance of the service tax payment by the service provider and its retention by the authorities played a crucial role in the tribunal's ruling, emphasizing compliance with the cenvat statute.