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TMI Blog2025 (4) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... their service tax liability as provider of service as well as recipient of service under RCM. 2.1. On the basis of audit observation under Spot Memo dated 09.08.2019, a SCN dated 16.01.2020 was issued to the appellant seeking recovery of wrong availment and utilization of input service credit amounting to Rs. 30,18,941/- along with interest and penalty. After due process, the said notice was adjudicated which resulted in confirmation of demands of service tax along with interest and penalty in the impugned order. 3. The appellant submits that the lower authorities have confirmed the demands in the impugned order on the following grounds: - (i) The appellant has taken input service credit under RCM of Rs. 30,18,941/- during June, 2017. The said amount of Rs. 30,18,941/- was deposited to the Government Exchequer under Challans dated 27.12.2017. The relevant ST-3 Return was also filed on 27.12.2017. The credit amount lying as on 30.06.2017 was transferred into the GST regime under Form TRAN-1. (ii) As per Rule 3(4)(e) of CCR, 2004 'while paying service tax the CENVAT credit shall be utilized only to the extent such credit is available on the last day of the month or quarter, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended upto 27.12.2017. (b) SRC Projects Pvt. Ltd. v AC, GST & CE, Salem [(2025) 26 Centax 93 (Mad)] In this case, the Hon'ble Madras High Court has passed the order in the favour of the petitioner to the effect that 'assessee could take recredit of amount of tax paid as recipient of royalty service from Government on reverse charge basis belatedly on 30-12-2017 as input tax credit in its electronic credit ledger'. 3.4. . In view of the decisions rendered by the Hon'ble Madras High Court, the appellant submits that they are eligible for taking, utilizing and transferring the input tax credit of Rs. 30,18,941/- payment of which under RCM on 27.12.2017. Accordingly, the appellant prayed for setting aside the demands confirmed in the impugned order and allow their appeal. 4. The Ld. A.R. reiterated the findings in the impugned order. 5. Heard both sides and perused the appeal documents. 6. I find that the appellant has availed CENVAT Credit amount of Rs.30,18,941/- under RCM in June, 2017 prior to the date of the payment of the said amount to Government Exchequer and filing of the ST-3 on 27.12.2017. I find that there is no dispute regarding the receipt of the service by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Revenue is concerned, this Court feels that, insofar as these three cases are concerned, since the facts are very peculiar, where, the petitioners availed service prior to 1-4-2017, for which, the amount payable to them have been paid to the service provider, but the tax alone has not been paid i.e., service tax as well as the duty referred to above and this has been paid only after triggering the petitioners by the Revenue, but this payment has been made within the reasonable/permissible period. But, before making these payments since the transitional period has come into effect, the peculiar situation has arisen. Otherwise, had there been no GST regime from 1-7-2017, the petitioners otherwise would have been eligible to claim Cenvat credit of all these amounts paid, for which, the eligibility of the petitioners to claim the credit is not in much dispute. 41. Merely because, the transitional provision has come into effect from 1-7-2017 and under Section 140(1) of the Act, the persons like the petitioners can make a claim only in respect of the credit which is already accrued as on 30-6-2017 and these credit had come into the account of the petitioners only subsequently, fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 142(3) is not permitted to be invoked in meeting situations like this, that situation would render that taxpayer remediless, hence, here also the "Doctrine of Necessity" can be invoked, in the considered opinion of this Court. 46. Since the language used in Section 142(3) of the Act is refund claim, the petitioner has made application for refund claim. However, under the erstwhile law, since the petitioners are not entitled to get any refund claim and their eligibility is confined only by taking the credit under Cenvat Credit Rules, beyond which, the relief cannot be stretched upon. Moreover, the Cenvat credit facilities which is a concession and if at all that concession has to be availed by the petitioners, that concession can be availed only in the manner known to law, for which, only credit facility can be adopted and therefore, the question of making any refund by way of cash as provided under Section 142(3) does not arise in this case, as, for which, the petitioners since have not been eligible or entitled to, that kind of claim cannot be made by the petitioners. 47. But at the same time, the petitioners application at least could have been considered by the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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