TMI Blog2023 (4) TMI 922X X X X Extracts X X X X X X X X Extracts X X X X ..... as also been prescribed in Rule 9 ibid - In this case, it is an admitted fact on record that the automobile dealers are registered with the service tax department for providing the taxable services and that the disputed service tax amount was paid by them into the government exchequer. When that is the admitted position, then denial of the benefit of such tax amount as cenvat credit to the appellants as the recipient of such service, cannot be questioned by the jurisdictional service tax authorities. In the present case, the department has mainly proceeded against the appellants for confirmation of the adjudged demands on the ground that no services were provided by the automobile dealers and therefore, Cenvat credit is not available to the appellants, based on the invoices issued by such dealers - Since, the issue regarding payment of service tax and compliance of the statutory provisions, more specifically as contemplated under Rule 4A of the Service Tax Rules, 1994 have not been disputed by the jurisdictional service tax authorities at the service provider s end, in our considered view, the same cannot be questioned or objected to by the service tax authorities, having jurisd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants have entered into agreements with the motor car dealers for obtaining the facilities such as, infrastructure sharing like desktops; deployment of personnel at dealer s premises for liasoning between the dealers and prospective buyers of vehicle; to key in the details of the customers in the portal of the appellants; to collect necessary premium from the customers and remit the same to the appellants; providing of space for display of posters, etc. The said facilities are used by the appellants to liaison with their customers and for servicing their insurance business within the dealer s premises. Pursuant to the provision of infrastructural facilities provided to the appellants, the dealers issue invoices for the service charges along with service tax attributable to such services on the appellants. Since the appellants use the above facilities provided by the motor car dealers in furtherance to the provision of output service, they avail Cenvat credit of service tax paid on the aforesaid input services, on the basis of the invoices issued by the motor car dealers (service providers) and utilize such Cenvat credit for discharging the service tax liability on the output serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellants are entitled to the Cenvat credit of the same. Anyway, classification is irrelevant post 01.07.2012; c) manner of payment of consideration not relevant to decide the nature of service provided to the Appellants. Reliance placed on Senairam Doongarmall v. CIT 1961 42 ITR 392 (SC); d) the nomenclature does not determine the nature of transaction, hence the incorrect description of services in the invoice does not render the invoice void; e) without prejudice, the issue is not one of non-provision of service, but mis-classification of the service; f) the Cenvat credit cannot be denied at the recipient's end without opening the assessment at the service provider's end. Reference is made to Modular Auto Ltd. V. CCE 2018 VIL 541 MAD ST, wherein the Hon'ble Madras High Court held that the credit cannot be denied at the recipient's end without opening the assessment at the service provider's end; g) the present matter is squarely covered by the decisions of Hon'ble Tribunal in the following cases: a. M/S Cholamandalam MS General Insurance Co. Ltd vs CGST 2021-VIL-78-CESTAT-CHE-ST b. M/S Cholamandalam MS General Insurance Co. Ltd Vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which the credit has to be availed has also been prescribed in Rule 9 ibid. On conjoint reading of the said statutory provisions, it would reveal that the responsibility of taking Cenvat credit in proper manner has been fixed on the assessee as recipient of input, capital goods and input service, on compliance of the provisions that the duties/taxes have been paid thereon and that the goods or services were received by the manufacturer of final product or by the provider of output service. The legislative intent behind enactment of the Cenvat statute is to avoid the cascading effect, meaning thereby that the element of excise duty or service tax paid on the goods/services, should be available to the intermediary manufacturer of final products or provider of output services as Cenvat credit, so that the ultimate consumer will not be hard hit by paying more money for the goods or services. In this case, it is an admitted fact on record that the automobile dealers are registered with the service tax department for providing the taxable services and that the disputed service tax amount was paid by them into the government exchequer. When that is the admitted position, then denial of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e when the Cenvat credit of service tax was availed by them. 9.1 We find that an identical issue came up for consideration by the Hon ble Madras High Court, in the case of M/s. Modular Auto Ltd. -vs.- Commissioner of Central Excise, Chennai [2018-VIL-541-MAD-ST]. Upon analysis of the facts of the case vis-a-vis the statutory provisions, the Hon ble High Court was pleased to admit the appeals and the following substantial questions of law were framed, for resolving the dispute: a) When the service provider was not before the Tribunal, whether the Tribunal can go into the question as to whether the said service provider had provided service to the appellant or not, more so when the said service provider has been assessed to service tax under Business Support Service for the service rendered by them to the appellant. b) Is the Tribunal not in error in refusing credit to the appellant for service tax paid by them to service provider when payment of service tax by the appellant for the service rendered by service provider is not in dispute and that it is settled, the assessment to tax at the hands of the service provider end cannot be questioned in the hand of service recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of Service Tax on them has not been reopened. 15. From the reasons assigned by the Commissioner (Appeals), we find that the Commissioner (Appeals) has travelled beyond the scope of allegation made in the show cause notices. By giving a different interpretation to the nature of transaction, which, in our considered view, could not have been done by the Appellate Authority in the light of the settled position with regard to the Service Tax liability admitted and paid by BIL. Thefore, unless and until, the assessment on BIL had been reopened, the nature of transaction as referred by BIL has to be held to be wrong and the Commissioner (Appeals) could not have given a different interpretation to the nature of claim made by the BIL from the assessees by interpreting the terminalogy used in the invoice. The correct test, which ought to have been applied by the Adjudicating Authority, Appellate Authority and the Tribunal, is as to what is the character of payment made by the assessees on which they have availed the CENVAT credit. 16. In the instant cases, it is not in dispute that whatever the portion of Service Tax component which was collected from the assessees by BIL was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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