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2018 (4) TMI 617 - AT - Service TaxReverse Charge Mechanism - appellant availing services from outside India - deemed service provider - discharge of service tax liability from CENVAT credit account - contravention of provisions of Section 66A and Section 68 of the Finance Act 1994, Rule 6 of Service tax Rules 1994 and Rule 3 (4) of CCR 2004 - Held that: - under CCR 2004 there is no bar for utilization of Cenvat credit for the deemed service provider to pay the service tax liability casted upon him in terms of Section 66A - In terms of Rule 2 (r) the Appellant is a deemed service provider - Rule 5 of Taxation of Service Rules (Provided from outside India and Received in India) Rules only refers to availing of Cenvat Credit and not utilization of cenvat credit. The restriction to utilize the cenvat credit came into Cenvat Credit rules by inserting explanation in rule 3 (4) vide N/N. 28/2012 – CE (NT) dt. 20.06.2012 which says that CENVAT credit cannot be used for payment of service tax in respect of services where the person liable to pay tax is the service recipient - before 20.06.2012 there was no restriction upon the deemed service provider to pay the service tax liability from cenvat credit. The appellant is a person liable to Service Tax. Once appellant is person liable to service tax, he becomes provider of taxable service under Rule 2(r) and consequently becomes output service provider under Rule 2(p) of the Cenvat Credit Rules - the finding of the Commissioner not treating the appellant as output service provider, is not correct. Appeal allowed - decided in favor of appellant.
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