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2022 (1) TMI 449 - AT - Service TaxSeeking reversal of CENVAT Credit - amount written off as bad debts - advertisement & sales promotion services - appellant has written off certain amounts for consideration of services, they have not received - period April 2009 to March 2012 - Rule 3(5C) of Cenvat Credit Rules - HELD THAT:- Prior to 01.04.2011, the appellant was required to pay service tax on receipt of consideration for the service provided, which means that if the appellant is failed to received consideration qua service provided, the appellant is not required to pay service tax; which does not mean that the appellant has provided exempted/non-taxable service. Rule 3 of the Centvat Credit Rules, 2004 deals with the situation for entitlement of the cenvat credit, which prescribes that a provider of the output service shall be allowed to take cenvat credit of any input service received by the provider of output service on or after 10th day of September, 2004 - Admittedly, the services on which the appellant has taken cenvat credit are ‘input services’ in terms of Rule 2(l) of the Cenvat Credit Rules, 2004 and is a provider of output service. Therefore, in terms of Rule 3 of the Cenvat Credit Rules, 2004, we hold that the appellant is entitled to avail cenvat credit on input services in question. Further, there is no such provision in the Cenvat Credit Rules, 2004 or in the Finance Act, 1994 for reversal of cenvat credit for the services provided for which no consideration for service provided is received by an assessee. The appellant has correctly availed the cenvat credit on input services although the amount of non-recoverable taxable service has been written off by the appellant for the period prior to 01.04.2011. The appellant has admitted at bar that they have paid service tax on all the taxable services provided by them after 01.04.2011 at the time of provision of service. Therefore, if it is so, the appellant cannot be liable for reversal of cenvat credit for the services provided after 01.04.2011 on which the appellant has paid service tax. Advertisement & sales promotion services - HELD THAT:- On going through the said invoice, it is found that the description of the service provided by IRCTC is SBI co-brand registered as “SBI”. The said invoice does not prescribe that IRCTC has provided any ‘catering service’ to the appellant. In fact, the lower authority has fell in error holding that IRCTC is providing only ‘catering service’ and the denial of cenvat credit is only on the basis of assumption and presumption - the appellant is entitled for cenvat credit on the services provided by IRCTC as advertisement services. Appeal allowed - decided in favor of appellant.
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