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2023 (5) TMI 334 - AT - Central ExciseCENVAT Credit - case of the department is that the GAR-7 challan is not the prescribed challan for availing the cenvat credit in terms of Rule 7 of Cenvat Credit Rules, 2004 - reverse charge mechanism - HELD THAT:- It is found that as per the undisputed fact of the case the service was received by the appellant, the invoices are in favour of the appellant. It is only the head office who paid the service tax under its centralized registration under GAR-7 challan. In this position, when the service was received by the appellant and service tax was undisputedly paid and particularly when the invoices are in favour of the appellant the credit cannot be denied. It is also not the case of the department that the part of the service was used by their other unit therefore, we do not see any reason why the cenvat credit should not be allowed to the appellant. As regard the availment of credit on the basis of GAR-7 challan, the challan is also a prescribed document under Rule 7 of Cenvat Credit Rules, 2004. Moreover, in case of payment of service tax under reverse charge mechanism the assessee pays the service tax on their own under GAR-7 challan therefore, the only document which is available for taking credit in respect of service tax under reverse charge mechanism is the GAR-7 challan only therefore, if the contention of the revenue is accepted then in every case of payment of service tax under Reverse Charge Mechanism, the assessee cannot avail the Cenvat credit which is not the provision under the law. Since the entire service was received by the appellant’s unit and their invoice of the same was also issued by the service provider in favour of the appellant’s unit the credit cannot be denied only on the basis that the Head Office has not issued the ISD invoice. The significance of ISD invoice is for the purpose that where the input service credit has to be distributed to more than one unit, the input service distributed invoice is required. However, in the present case, since entire service covered under the invoice of service provider was received and used by the appellant, there is no case of distribution of input service credit to any other unit except the appellant unit. Only for this reason also even though the ISD invoice was not issued, the credit cannot be denied. It is found that the adjudicating authority in the adjudication order dropped the demand not only on merit but also on limitation. From the perusal of the revenue’s appeal before the Commissioner (Appeals) it is found that the revenue has not uttered a word as regard the dropping of demand on time bar therefore, the revenue has not made out any ground on limitation - the dropping of demand on limitation by the adjudicating authority has attained finality therefore, even if it is assumed that the demand on merit is tenable, the same is not maintainable on limitation. Accordingly, the demand is not sustainable on the ground of time bar also. The impugned order is set aside - Appeal is allowed.
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