9911796707
TMI Blog2024 (6) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... the eligibility to utilize CENVAT Credit in discharging service tax on Reverse Charge Mechanism cannot be questioned and accordingly, held to be admissible - there are no merit in the impugned order confirming demand of Rs.14,36,72,226/- with interest and penalty, hence, accordingly set aside. Whether CENVAT Credit on various input services claimed to have been used in providing output services amounting to Rs.25,99,085/- is admissible? - HELD THAT:- The appellant submits that all these input services availed credit on these services prior to 01.04.2011 and held to be admissible under various judgments of this Tribunal. He fairly submits that since the ld. Commissioner has not recorded findings on principle of admissibility and substantial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eging that they had wrongly utilized CENVAT Credit in discharging their service tax liability under Reverse Charge Mechanism during the period December 2010 to March 2011 and also availing inadmissible CENVAT Credit on various input services, show cause notice was issued to the appellant on 23.04.2012 for recovery of the service tax amounting to Rs.14,36,72,226/- and CENVAT Credit of Rs.2,60,66,700/- with interest and proposal for penalty. On adjudication, the entire demand of service tax of Rs.14,36,72,226/- was confirmed with interest and penalty; and part of CENVAT Credit amounting to Rs.25,99,085/- was confirmed with interest and penalty; balance amount of CENVAT Credit was allowed by the Commissioner. Aggrieved by the said order, the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied in the light of the caselaws submitted and documentary evidences produced by the appellant during the course of adjudication proceedings. 5. Heard both sides and perused the records. 6. The issues involved in the present appeal for determination are : (i) whether service tax paid by the appellant on tax on Reverse Charge Mechanism basis by utilizing CENVAT Credit for the period prior to 01.04.2011 is valid; and (ii) CENVAT Credit on various input services claimed to have been used in providing output services amounting to Rs.25,99,085/- is admissible. 7. As regards the first issue concerned, we find that this Tribunal in the HDFC s case (supra) has observed that for the period prior to the amendment to the relevant Rules, the eligibili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not utilization of cenvat credit. Further the restriction to utilize the cenvat credit came into Cenvat Credit rules by inserting explanation in rule 3 (4) vide Notification No. 28/2012-CE (NT) dt. 20.06.2012 which reads as under: Explanation. - CENVAT credit cannot be used for payment of service tax in respect of services where the person liable to pay tax is the service recipient 5. We thus find that before 20.06.2012 there was no restriction upon the deemed service provider to pay the service tax liability from cenvat credit. The Tribunal in the case of M/s Kansara Modler Ltd. 2013 (32) STR 209 (TRI) has allowed the utilization of credit. The relevant portion of the order is as under : 4. We find in this case contention of Revenue is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax. Once appellant is person liable to service tax, he becomes provider of taxable service under Rule 2(r) and consequently becomes output service provider under Rule 2(p) of the Cenvat Credit Rules. Revenue is also relying on Rule 5 of Taxation of Services (Provided from Outside India and Received in India) Rules. We find that Rule 5 refers to availing of Cenvat credit and not to utilization of credit. We are therefore of the view that the finding of the Commissioner not treating the appellant as output service provider, is not correct and accordingly we set aside the impugned order and allow the appeal. Similar view has been expressed by this Tribunal in Welspring Universal s case and Sangam (India) Ltd. s case (supra). Also, we find t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. Consequently, the matter is remanded to the adjudicating authority for the limited purpose of verification of the admissibility of CENVAT Credit to the extent of Rs.25,99,085/-. The appellant are at liberty to file relevant documents in support of the claim of admissibility of CENVAT Credit. 11. In the result, the impugned order is modified to the extent of setting aside the demand of service tax of Rs.14,36,72,226/- with interest and penalty, and for verification of the admissibility of CENVAT Credit, it is remanded to the adjudicating authority. Since the matter is quite old, the ld. adjudicating authority as far as practicable decide the same within three months from the date of communication of this order. 12. The appeal is disposed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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