TMI Blog2018 (12) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... alue and the service tax indicated thereon due to some reasons - The order under challenge is silent about Circular despite it was duly brought to the notice of the adjudicating authority below and despite the fact that it covers the issue involved herein. The authority below has opted to rely upon Circular No. 877 dated 17.11.2008. The perusal thereof shows that it is about clarification regarding reversal of cenvat credit in case of trade discount. This perusal itself is sufficient to hold that the Circular is not applicable to the facts in hand. The Commissioner(Appeals) has wrongly placed reliance on the said Circular. Irrespective that this Circular is about the excise duty but the intention of the Revenue herein is also same as in Circular No. 122 i.e. irrespective the price is reduced subsequent to raising the invoice the credit can still be availed on the duty paid in accordance of the amount shown in the invoice. This finding is opined to be sufficient to hold that the findings of Commissioner(Appeals) are erroneous on the face of it. When the service tax paid by the provider has not varied, cenvat credit cannot be reduced, no question of denying availment at all ari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the appellant. Ld. Counsel has placed his reliance upon a Circular No. 122/3/2010-ST dated 30.04.2010 to impress upon that when the entire service tax amount on the invoices has been paid by the service provider to the exchequer the service provider is entitled to avail cenvat credit of the said service tax paid. It is submitted that despite the Circular was brought to the notice of Adjudicating Authorities below as is otherwise apparent from the grounds of Appeal before the Commissioner(Appeals) the impugned Order is miserably silent qua the said Circular. It is submitted that violation of Rule 4(7) of CCR has wrongly been alleged. 3.1 Appellant further submitted that the eligibility to take cenvat credit on the amount of service charges adjusted as liquidated damages has already been settled in appellant s own case for the earlier period of 2006-07 to 2009-March 2010 vide the Final Order No. 55702-55703/2016 dated 24.11.2016. The period in dispute is the immediate subsequent period i.e. w.e.f. April 2010 to December 2010. It is further impressed upon that for the period subsequent to the period in dispute even the Commissioner has dropped the demand. Even Circular No. 877/1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpressed upon as a distinguishing fact of the present case than that of the decisions relied upon by the appellant. While finally justifying the Order, it is submitted that there is no infirmity of the opinion of Commissioner (Appeals) that the input service credit taken by the appellant to the extent of service tax payable on the amount retained by them on account of liquidated damages is not allowable to them. The Appeal is accordingly prayed to be dismissed. 5. After hearing both the parties and perusing the record including the Order under challenge I opine to first have a glance on the statutory provision the violation whereof has been alleged. Rule 3(1) of CCR reads as follows:- Rule 3 CENVAT credit (1) A manufacturer or producer of final products or a provider of taxabe service shall be allowed to take credit (hereinafter referred to as the CENVAT credit) of (i) to (x) ------- [Provided that the CENVAT credit shall be allowed to be taken of the amount equal to central excise duty paid on the capital goods at the time of debonding of the unit in terms of the para 8 of notification NO. 22/2003- Central Excise, published in the Gazette of India, part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been paid and as to whether when the service receiver does not pay the full invoice value and the service tax indicated thereon due to some reasons the following clarification has come up for which the said Notification: 5b) In the cases where the receiver of service reduces the amount mentioned in the invoice/ bill/ challan and makes discounted payment, then it should be taken as final payment towards the provision of service. The mere fact that finally settled amount is less than the amount shown in the invoice does not alter the fact that service charges have been paid and thus the service receiver is entitled to take credit provided he has also paid the amount of service tax, (whether proportionately reduced or the original amount) to the service provider. The invoice would in fact stand amended to that extent. The credit taken would be equivalent to the amount that is paid as service tax. However, in case of subsequent refund or extra payment of service tax, the credit would also be altered accordingly. 8. The order under challenge is silent about Circular despite it was duly brought to the notice of the adjudicating authority below and despite the fact that it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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