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2023 (5) TMI 241 - AT - Service TaxNon-payment of service tax on the input services - removal of input as such from the factory - requirement of reversal of CENVAT Credit as per the provisions of sub-rule (5) of Rule 3 of CCR - HELD THAT:- On careful examination of the said statutory provision, it transpires that no identical provisions has been provided for reversal of Cenvat credit in respect of the input services. Since, the legislative intent behind the said rule is not to insist for reversal of Cenvat credit on service tax amount, in case where the inputs are removed as such, the action taken by the department in confirming the cenvat demand in the present case shall not stand judicial scrutiny. In an identical case, the Hon’ble Punjab and Harayana High Court in the case of COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH VERSUS PUNJAB STEELS [2010 (7) TMI 252 - PUNJAB AND HARYANA HIGH COURT] has held that in absence of any statutory provisions, creating the embargo for reversal of Cenvat credit oninput services, the department cannot insist for reversal of such credit from the assesse. This court finds that the view as expressed by the Tribunal is strictly in conformity with the Rules. Rule 2(k) of the Rules defines ‘input’, whereas Rule 2(l) defines ‘input service’, meaning thereby both the terms have been defined independently. Rule 3 defines the term ‘Cenvat credit’, which includes duty paid under various enactments and also the service tax leviable under Section 66 of the Finance Act, 1994. Rule 3(5) of the Rules only talks about the Cenvat credit taken on inputs or capital goods. It does not refer to the Cenvat on input service, whereas Rule 5, on which reliance is sought to be placed by the Revenue, specifically talks about the Cenvat credit on any input or input Service used in the manufacture of final product. This rule pertains to refund in case of exports, which stands altogether on different footings. The CBEC vide instruction dated 07.12.2015 in order to bring uniformity in the practice of assessment has issued the minutes of the Tariff conference conveying the said statutory provision in line with the judgment delivered by the Hon’ble Punjab and Harayana High Court in the case of Punjab Steels. There are no merits in the impugned order, insofar as it has confirmed the adjudged demands on the appellant holding that the they are required to reverse to Cenvat credit of service tax paid on input services for the purpose of sub-rule (5) of Rule 3, ibid, in the eventuality, when the inputs are removed as such. Appeal allowed.
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