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TMI Blog2016 (12) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Shaswat, Advocate for the Respondent Per V Padmanabhan: The respondent are manufacturers of zinc. They availed Cenvat credit of Central Excise duty paid on inputs and capital goods and of service tax paid on input services in accordance with the provisions of Cenvat Credit Rules, 2004. The dispute in this case is about the Cenvat credit of service tax in respect of certain input services received by them during the period from April 2009 to December 2009. The respondent in terms of their contract with the service providers, while making payment to the service providers against the invoices raised by them, retained a percentage of the billed amount towards performance guarantee which was being paid subsequently after certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sistant Commissioner, the respondent pleaded that the service providers have paid service tax to the Government on the total billed amount receivable by them as mentioned in the invoices, notwithstanding the fact that they were not entitled to receive the said amount hundred percent and the retained amount was to be received later on, and on this basis they had pleaded that since the service tax has been paid by the service providers on the full invoice value including the amount not received by them, they (respondent) may be allowed its Cenvat credit. However, this plea was not accepted by the Assistant Commissioner observing that even if the entire input service is received and the service tax on the entire value of service is paid by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax. According to the revenue, in terms of Rule 4(7) the demands made in the order in original are required to be upheld. Inasmuch as the respondent has retained part of the payments due to the service provider. 2. Heard both sides. 3. Learned advocate appearing for the respondent cites the decision of the Tribunal in the respondents own case on identical facts for a different period as CCE Jaipur II vs. Hindustan Zinc Ltd. [2014 (34) STR 440 (Tri-Del)]. 4. Learned DR reiterates the finding of the original adjudicating authority and prayed that the impugned order may be set aside and the order in original upheld. 5. Learned advocate takes support from earlier order passed in appellants own case. 6. I have conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se may be, challan referred to in Rule 9 . A doubt raised is as to whether the receiver of input service can take credit only after the full value that is indicated in the invoice, bill or challan raised by the service provider, and also the service tax payable thereon, has been paid. It has been represented that in many cases, after the invoice is issued by the service provider, the service receiver does not make the full payment of the invoiced amount on account of discount agreed upon after issuance of invoice; or deducts certain amount due to unsatisfactory service; or withholds some amount as security to be held during contract period. Due to these reasons the value paid may not tally with the amount indicated in the invoice, bill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed under said Rule 4 (7). Thus, in the case of Associate Enterprises , credit of service tax can be availed of when the payment has been made to the service provider in terms of Section 67 (4) (c) of Finance Act, 1994 and the service tax has been paid to the Government Account. (b) In the cases where the receiver of service reduces the amount mentioned in the invoice/bill/challan and makes discounted payment, then it should be taken as final payment towards the provision of service. The mere fact that finally settled amount is less than the amount shown in the invoice does not alter the fact that service charges have been paid and thus the service receiver is entitled to take credit provided he has also paid the amount of servic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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