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TMI Blog2010 (12) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... the service tax credit in respect of services received prior to 10-9-2004 would be available only to service provider, as prior to 10-9-2004, a manufacturer was not entitled for credit of service tax paid on any input services - neither in terms of the transitional provisions of Rule 11(1) nor in terms of 3(1) of Cenvat Credit Rules, 2004, the credit of service tax would be available - since this is a case of taking wrong Cenvat credit, normal penalty under Rule 15(1) would be applicable - Decided against the assessee - E/2374/2008-SM(BR) - 111/2011-SM(BR)(PB) - Dated:- 30-12-2010 - Shri Rakesh Kumar, J. REPRESENTED BY : Shri V. Swaminathan, Advocate, for the Appellant. Shri R.K. Gupta, DR, for the Respondent. [Order]. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l customs duty paid on inputs and capital goods and of service tax paid on input services was available to a manufacturer of finished products and similarly, the credit of central excise duty and additional customs duty paid on inputs and capital goods and of service tax paid on input services was available to a provider of taxable output services. 1.3 In this case, though taxable services had been received by the appellant prior to 10-9-2004 and the invoices by the service provider had been issued prior to 10-9-2004, the service tax was paid by the service providers after 10-9-2004, when the payment was received by them. The Appellant on the basis of the above mentioned two invoices dated 6-8-2004 and 8-9-2004 took total credit of servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellants are eligible for credit in terms of the provisions of Rule 4(7), according to which, the service tax in respect of the input services shall be allowed on or after the day on which payment is made of the value of input service and the service tax payable, as indicated in invoice/bill is paid, that since in this case, the payment had been made by the appellant to the services provider after 10-9-2004 and the service providers had been paid the service tax at that time, the credit would be available to the appellant in terms of the sub-rule 4(7) of the Cenvat Credit Rules, 2004, that the appellant had earned the Cenvat Credit prior to 10-9-2004 when the services had been received and, therefore, this credit would be available to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly the input services had been received prior to 10-9-2004, but the payment of about Rs. 6 Lakhs out of total amount of Rs. 8 Lakh, had been received by the service providers prior to 10-9-2004; (b) transitional provisions under Rule 11(1) are not applicable to a manufacturer in respect of input services, as prior to 10-9-2004, a manufacturer of finished goods was not entitled at all for any input service credit and, therefore, he could not have earned the same; and (c) the provisions of Rule 4(7) have to be read with the provisions of Rule 3(1) of the Cenvat Credit Rules. 3. I have carefully considered the submissions from both the sides and perused the records. The point of dispute in this case is as to whether the service t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, 2004, the credit of service tax would be available. In view of this, I do not find any infirmity in the impugned order upholding the Cenvat Credit demand. However, coming to the question of penalty, since it is not disputed that the appellant, after taking the credit second time, had informed the Department about this, they cannot be accused of suppression of facts and hence, the penalty under Rule 15(2) read with Section 11AC of the Central Excise Act, 1944 would not be called for. However, since this is a case of taking wrong Cenvat credit, normal penalty under Rule 15(1) would be applicable. Accordingly, while the Cenvat credit demand along interest is upheld, penalty on the appellant is reduced to Rs. 10 Thousand only. The impugned o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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