Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2013 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (8) TMI 497 - AT - Service TaxCenvat credit of service tax - Rule 4(7) - Proportionate credit equal to amount received - certain amount withheld by the recipient of services while making payment to service provider - Rule 4 (7) of the Cenvat Credit Rules, 2004 states that the Cenvat credit in respect of input services shall be allowed on or after the day on which payment is made of the value of input service and the service tax paid or payable, as is indicated in the invoice, bill or as the case may be, challan referred to in Rule 9 - Held that:- According to the Board’s Circular No. 122/3/2010-ST dated 30/4/10, credit of full service tax paid by a service provider in respect of service provided to a manufacturer would be available to the manufacturer even if the amount payable to the service provider has been reduced, so long as the service tax paid by the service provider has not changed – Decided against the Revenue. Rule 4(7) had been framed to prevent a situation where while on the basis of the invoice issued by a service provider in respect of some service provided or to be provided, the service recipient takes the Cenvat credit, even though the service provider has not paid the service tax for the reason that for some reasons, there is delay in receipt of payment by him from the service recipient. Rule 4 (7) would be applicable only in a situation where though the service provider has issued the invoice, but he has not paid the service tax. But where there is no dispute that service tax has been paid by the service provider on the full invoice value, even though he has not received full payment from the service recipient and part of the payment due to him has been withheld by the service recipient due to some reason, this rule would not be applicable. Moreover, it is also not the department’s case that the amount withheld was never paid or that the service providers subsequently sought and obtained refund of the service tax amount not reimbursed to them by the respondent. When the service tax paid by the service provider has not varied, the Cenvat credit also cannot be reduced. - Full claim of credit allowed - Decided in favor of assessee.
|