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C.C.E. Delhi-I Versus M/s. Aero Club

2016 (8) TMI 881 - CESTAT NEW DELHI

Cenvat credit - availed input services credit without payment of value of input service and service tax on such service to the provider of services - violation of Sub Rule (7) of Rule 4 of Cenvat Credit Rules 2004 - Held that:- we have perused certain sample entries of verification made by original authority with reference to date of payment of value for service / service tax to the provider of services. It is very clear that at least in respect of some of the bills the respondent have availed a .....

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essary to establish the payment of value as well as tax before availing the credit by supporting documentary evidence, as we have seen at least a few instances of availing credit before actual payment. The case has to go back to the original authority for verification of all entries to arrive at a proper decision about the eligibility of respondent for this credit. If the credits are availed prior to payment then necessarily the question of interest liability is to be examined, if otherwise, the .....

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Delhi-I. The respondents are engaged in manufacture of footwear and shoes. They were availing Cenvat Credit on various input services like franchisee services, commercial agent services paid to different retail showrooms. The allegation against the respondent is that they have availed such input services credit without payment of value of input service and service tax on such service to the provider of services. The case was adjudicated by the original authority who confirmed the denial of cred .....

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dit before the payment of service tax. It was also contested that the burden of proving the correctness of credit taken is on the assessee in terms of Sub Rule (6) of Rule 9. In the present case the verification report brought out instances of violation of Sub Rule (7) of Rule 4 to the effect that credit has been availed even before the payment of value of services and the tax payable on the said services. The department also contested the impugned order for non imposition of penalty in the pres .....

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nts submitted by them before arriving at his decision. 5. We have heard both the sides and examined the appeal records. 6. The legal position with reference to availing credit on input services is very clear in terms of Sub Rule (7) and Rule 4 of Cenvat Credit Rules 2004, the Cenvat Credit in respect of input services shall be allowed on or after the day which payment is made of the value of input service and the service tax paid or payable as is indicated in invoice, the bill or as the case may .....

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