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TMI Blog2024 (9) TMI 1411X X X X Extracts X X X X X X X X Extracts X X X X ..... ty or otherwise. Understandably, payment as in the case in hand, which may be in the nature of compensation, but is clearly towards keeping the Indian entity alive and kicking and to meet various expenditure including overheads. That therefore, is certainly not per se towards the clearance of a manufactured product and hence, there was no question of CENVAT credit being availed, just because the Indian entity chose to pay service tax. CENVAT credit, as governed by Rule 3 ibid is available to a manufacturer or the provider of taxable service of the input tax paid, which is used in the manufacture or provision of a taxable service, which is not the case here - the department is justified in holding that the credit has been wrongly availed, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the Revenue. 3. After hearing both sides, the following issues emerge for our consideration : (i) whether the original authority is justified in confirming the demand of incorrectly availed input cenvat credit, along with interest and penalty? (ii) whether the above demand is sustainable on the question of limitation? 4. It is the case of the Revenue that the importer had not received any input service and hence the CENVAT Credit availed by them was not proper. There is no denial of the fact that the terms of the contract between the appellant and its overseas entity that the terms of the agreement/contract is binding on both the parties. To say that the assessee did not receive any input service for which a certain amount was received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nial on this aspect, namely that the appellant had availed the credit of the service tax that had already been remitted, though such remittance was claimed to be erroneous. Hence, it is not the case that the service tax itself was not paid, but however credit was sought to be availed by the taxpayer. 7. Perusal of the impugned Order-In-Original reveals that the Original Authority has confirmed the demand alleging the incorrect availment of input credit of the service tax, to be in violation of the provisions of Rule 3 of CCR, 2004. Provisions of Rule 3 ibid indicate as to who could take credit of the service tax paid and hence, if the appellant is held to be not a manufacturer or producer of the products or the provider of taxable services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the nature of compensation, but is clearly towards keeping the Indian entity alive and kicking and to meet various expenditure including overheads. That therefore, is certainly not per se towards the clearance of a manufactured product and hence, there was no question of CENVAT credit being availed, just because the Indian entity chose to pay service tax. CENVAT credit, as governed by Rule 3 ibid is available to a manufacturer or the provider of taxable service of the input tax paid, which is used in the manufacture or provision of a taxable service, which is not the case here. The amount is paid by the foreign entity for its sustenance and nothing else, and hence, the same cannot be given the colour of payment towards provision of servic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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