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2013 (6) TMI 137 - CESTAT AHMEDABADCenvat Credit - input services - denial of the proportionate credit of Service Tax credit, on the ground that the appellant had written off the certain amount as bad debts from the books of accounts for which input services were utilised. - held that:- Department is trying to co-relate the input services to the output services. It is settled law that there cannot be one to one co-relation in availing of the CENVAT Credit of the input service to the provision of output service. As per Rule 6 of Service Tax Rules, Service Tax is payable when the payment towards taxable services are received. No Service Tax is payable on that part of the payment which is not received. No Service Tax is payable on that part of the payment which is not received. There is no provision in the CENVAT Credit rules to deny proportional credit on the inputs which were used in providing the output service on which recovery is pending. The rule envisages reversal of credit wrongly utilized or erroneously refunded. In this case, the services rendered are taxable services. The credit of inputs/input services availed is utilized in providing taxable output services. Hence, there is nothing wrong in availing and utilization of the credit. Rule 14 does not envisage recovery of credit in situations where Service Tax recovery was pending and written off as bad debts later. - demand not sustainable - decided in favor of assessee.
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