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TMI Blog2018 (12) TMI 1535X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice tax under reverse charge mechanism - The decision laid down in the case of Kansara Modler Ltd. [2014 (1) TMI 1095 - CESTAT NEW DELHI] have categorically held that the assessees are eligible to take credit of the service tax paid under reverse charge mechanism - Credit allowed. CENVAT Credit - the appellant has not started providing output service and have taken registration for providing output service of works contract service only with effect from 23.10.2009 - Department is of the view that they are eligible to take credit only from the date of registration - Held that:- The services which are needed to start providing output service for manufacturing finished products would be eligible for credit. The said issue has been suffici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.9.2010 was issued for the year April 2009 to March 2010 proposing to recover the irregularly availed credit to the tune of ₹ 79,26,871/- along with interest and also for imposing penalties. After due process of law, the original authority confirmed the demand, interest and imposed penalties, against which Appeal No. ST/334/2012 is preferred by the appellant. 2. During the course of audit of accounts, it was noticed that the appellant had availed CENVAT credit of ₹ 1,58,89,282/- for the period March 2008 to March 2009 and the department was of the view that the said credit which are availed on various input services are not eligible for the reason that the appellant has not obtained service tax registration for their output ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services. The department does not have a case that the appellant has not discharged the service tax on the input services. They have raised the demand alleging that the appellant has not taken registration for the output services (WCS/CCS) during the disputed period and with regard to the consulting engineer service that appellants have not provided any output service during such period and therefore not eligible. He adverted to the definition of input service as it stood prior to 1.4.2011 and argued that the input services of setting up of factory / office premises is eligible to the appellant and therefore it is implied that even if the appellant has not started providing output services, it can avail credit on various input services. Al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut services. The service can be qualified to be an input service only if these are used for providing the output service. Further, the services have been received from the foreign company. The appellant does not have a case that the services like management consultancy, manpower recruitment, renting of immovable property, survey, design, engineering, telecom service etc. are output services for the foreign company. Only if these are output services for the foreign company itself, the appellants are eligible for the credit on consulting engineer service. 4.1 With regard to the demand raised alleging that the appellant has not registered for output services of works contract services and therefore not eligible for credit to the tune of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided by the provider of taxable service, to a customer, client, subscriber, policy holder or any other person, as the case may be, and the expressions provider and provided shall be construed accordingly; (ii) Rule 2(q) - person liable for paying service tax has the meaning as assigned to it in clause (d) of sub-rule (1) of Rule 2 of the Service Tax Rules, 1994; (iii) Rule 2(r) - provider of taxable service include a person liable for paying service tax; Rule 2(1)(d)(iv) of Service Tax Rules. (iv) in relation to any taxable service provided or to be provided by any person from a country other than India and received by any person in India under section 66A of the Act, the recipient of such service; 6. If ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only from the date of registration. Needless to say that the definition of input service prior to 1.4.2011 included services like setting up of factory / office. From this it can be inferred that services which are needed to start providing output service for manufacturing finished products would be eligible for credit. The said issue has been sufficiently analyzed in various cases. The Hon ble High Court of Karnataka in the case of Tavant Technologies Ltd. (supra) had followed the decision in mPortal Wireless Solutions Pvt. Ltd. 2012 (27) STR 134 (Kar.) and held that for availing as well as refund of unutilized credit, registration of service tax is not required. There is no rule or statutory provision which makes registration a conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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