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TMI Blog2019 (10) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. This appeal, under Section 83 of the Finance Act, 1994 read with Section 35-G of the Central Excise Act, 1944, is directed against the Final Order, dated 1st February, 2018, and Miscellaneous Order dated 14th September, 2018 passed by the Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as CESTAT ). 2. The dispute pertains to the period 1st April, 2005 to 16th May, 2008. During the said period, the appellant was engaged in providing advertising and other services through media, television, radio, websites, newspapers magazines, bill-boards and hoardings and during the period in issue the present case, for which it was duly registered with the Service Tax authorities. 3. The present dispute emanates from a Show Cause Notice dated 30th August, 2010, issued to the appellant, proposing two demands of service tax, of ₹ 24,72,677/- and ₹ 1,93,74,146/- respectively. Of these, the former demand, of ₹ 24,72,677/-, stands dropped; ergo, we are not required to concern ourselves therewith. The controversy, in the present appeal, relates to the sustainability of the second demand, as proposed in the aforesaid Show Cause No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates to various categories, namely, Advertising Agency Service, Manpower Recruitment Service, Business Auxiliary Service, Management Consultancy Service, Management, Maintenance or Repair Service and On-line Information database Access Service. The provider of the said services was located outside India. The statutory backdrop 9. Service tax became payable, by the appellant, on the said services, by virtue of Section 66A of the Finance Act, 1994, which reads thus: 66A. Charge of service tax on services received from outside India. (1) Where any service specified in clause (105) of Section 65 is, (a) provided or to be provided by a person who has established a business or has a fixed establishment from which the service is provided or to be provided or has his permanent address or usual place of residence, in a country other than India, and (b) received by a person (hereinafter referred to as the recipient) who has his place of business, fixed establishment, permanent address or usual place of residence, in India, such service shall, for the purposes of this section, be taxable service, and such taxable servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... z), (zb), (zc), (zi), (zj), (zn), (zo), (zq), (zr), (zt), (zu), (zv), (zw), (zza), (zzc), (zzd), (zzf), (zzg), (zzh), (zzi), (zzl), (zzm), (zzn), (zzo), (zzp), (zzs), (zzt), (zzv), (zzw), (zzx), (zzy), (zzzd), (zzze), (zzzf), and (zzzp) of clause (105) of section 65 of the Act, be such services as are performed in India: Provided that where such taxable service is partly performed in India, it shall be treated as performed in India and the value of such taxable service shall be determined under section 67 of the Act and the rules made thereunder; (iii) specified in clause (105) of section 65 of the Act, but excluding (a) sub-clauses (zzzo) and (zzzv); (b) those specified in clause (i) of this rule except when the provision of taxable services specified in clauses (d), (zzzc), and (zzzr) does not relate to immovable property; and (c) those specified in clause (ii) of this rule, be such services as are received by a recipient located in India for use in relation to business or commerce. 4. Registration and payment of service tax. The recipient of taxable services provided from outside India and received in India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 004 provides that the CENVAT credit may be utilized for payment of service tax on any output service. It follows therefrom that CENVAT credit of duty or service tax, etc. availed on any input or input service etc. may be utilized towards payment of service tax on any output service. The services received by the Noticee from outside India are not output services for the purpose of utilization of CENVAT credit under Rule 3 of the CENVAT Credit Rules, 2004. Further, Rule 5 of the Taxation of Services (Provided from Outside India and Received in India) Rules, 2006, erases every shadow of doubt in this regard. This rule in clear and categorical items envisages that the taxable services provided from outside India and received in India shall not be treated as output services for the purpose of availing credit of duty of excise paid on any input or service tax paid on any input services under CENVAT Credit Rules, 2004. Thus, a reading of statutory provisions contemplated in Section 66A(1) of the Act along with Rule 2(1)(d)(iv) of the said Rules, Rules 3(1) and 3(4)(e) of the CENVAT Credit Rules, 2004 and Rule 5 of the Taxation of Services (Provided from Outside India and Received in Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 1st July, 2012, service tax, even on reverse charge basis, i.e., under Section 66-A of the Finance Act, 1994, was payable from the CENVAT credit account of the assessee. 18. The aforesaid ROM application, filed by the appellant, was also dismissed by the CESTAT, vide Miscellaneous Order dated 14th September, 2018. 19. Aggrieved by the aforesaid final order dated 1st December, 2018 of the CESTAT upholding the confirmation, against it, of the service tax demand of ₹ 1,93,74,146/- as well as by Miscellaneous Order dated 14th September, 2018 (supra), dismissing the application, filed by the appellant for rectification of mistake therein, the appellant has moved this Court, by means of the present appeal under Section 83 of the Finance Act, 1994 read with Section 35-G of the Central Excise Act, 1944. 20. We have heard Mr. Karan Sachdev, learned counsel for the appellant and Mr. Amit Bansal, learned Standing Counsel appearing for the respondent. 21. A query was put to Mr. Amit Bansal at the outset, as to how, when the Explanation, prohibiting payment of service tax, on reverse charge basis, from the CENVAT credit account, was introduced in Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recipient in India, is provided by a service provider located outside India, as the person liable for paying service tax . 26. The issue to be determined is whether the appellant, as the person liable to pay the service tax on services provided by service providers located outside India, could pay the said service tax by utilization of CENVAT credit available with it. 27. A bare reading of the CENVAT Credit Rules reveals that the answer to this question has necessarily to be in the affirmative. This may be demonstrated thus: (i) Rule 3(4) of the CENVAT Credit Rules clarifies that CENVAT credit may be utilised for payment, inter alia, of service tax on any output service. (ii) Output service is defined, in Rule 2(p) of the CENVAT Credit Rules, which envisages that any taxable service, excluding the taxable service referred to in sub-clause (zzp) of Clause (105) of Section 65 of the Finance Act,1994 provided by the provider of taxable service, to a customer, is an output service . (iii) Provider of taxable service is defined, in Rule 2(r) of the CENVAT Credit Rules as including a person liable for paying service tax. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on 3rd August, 2018], the High Court of Punjab and Haryana in C.C.E. v Nahar Industrial Enterprises Ltd., 2012 (25) STR 129 (P H) and the High Court of Bombay in C.C.E. v. U. S. V. Ltd, 2019-VIL-334-BOM-ST. 29. All these decisions have been digested by the High Court of Bombay in U. S. V. Ltd (supra) , para 7 of which reads thus: The view taken by the Tribunal in respect of Rule 3(4)(e) of the Cenvat Credit Rules, 2004 now stands concluded against the revenue by the decision of the Gujrat High Court in the case of Commissioner of C.Ex. Customs vs. Panchmahal Steel Ltd., 2015 (37) S.T.R. 965 (Guj.), Delhi High Court in the case of Commissioner of Service Tax vs. Hero Honda Motors Ltd. 2013 (29) S.T.R. 358 (Del.) and Punjab and Haryana High Court in Commr. Of C.Ex. Chandigarh vs. Nahar Industrial Enterprises Ltd., 2012 (25) S.T.R. 129 (P H) . The aforesaid decisions have been followed by this Court in The Commissioner of CGST Central Excise v/s. Godrej Boyce Mfg Co. Ltd. (Central Excise Appeal No. 23 of 2019) decided on 24th June, 2019 to allow utilisation of CENVAT credit for payment of service tax on reverse charge basis GTA (Goods Transp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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