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2017 (2) TMI 778 - AT - Service TaxCENVAT credit - duty paying document - endorsed bill of entry - import of goods by the customers for use in rendering of ‘technical testing and analysis service' - Held that: - Taxability under the charging section was predicated upon three essential factors: an activity, a provider and a recipient - without all three ingredients, the intangible service is not amenable to isolation as taxable and, unless taxable, provider of a service could not claim coverage under CENVAT Credit Rules, 2004. The situation has not altered in the ‘negative list’ regime either. The proposition is, indeed, dangerous; an importer may use or keep imported goods and, not having taken credit, may endorse the bill of entry to another person for availment of credit. We would thereby be legalising trafficking in CENVAT credit if the contention of appellant is accepted because of the accounting perfection that it portrays. That there is no loss to public exchequer as credit is an entitlement. Credit is an entitlement only to the extent the output is transacted in a normal commercial engagement. The specific reference to lease, hire-purchase or loan of capital goods appear to be intended to delink the goods from ownership without detracting from the documentary pre-requisites. That, in view of the primary condition of eligibility for CENVAT credit, is the scope of the reference to such acquisition. It was only in December 2013 by notification no. 18/2013-CE (NT) that rule 2 (ij) incorporated importer issuing an invoice among the first stage dealer with appropriate safeguards. Till such amendment, CENVAT Credit Rules, 2004 did not facilitate the transfer of credit concomitant with transfer of imported goods. Credit denied - appeal dismissed - decided against appellant.
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