TMI Blog2019 (5) TMI 1093X X X X Extracts X X X X X X X X Extracts X X X X ..... the excess service tax. An alternative could have been for the appellant to seek refund of the excess amount of service tax paid as the persons who bore the burden of excess service tax. From a plain reading of Rule 4(7), it does not appear that Rule 4(7) provides for a proportionate reduction of CENVAT Credit where the value of services rendered is reduced subsequently but service tax was discharged on the original amount and borne by the service recipient - This is consistent with the circular of the Board No. 877/15/2008-CX, dated 17.11.2008 in which the Board has clarified that where higher duty than the due is paid due to subsequent reduction in prices, credit as per invoice is available to the assessee. This is also consisted with similar circular regarding credit of service tax in Board s Circular No. 122/3/2010-ST, dt.30.04.2010. Both these circulars were, of course, issued prior to Rule 4(7) was amended w.e.f. 01.04.2011. The appellant is entitled to CENVAT Credit of the service tax paid by them as indicated in the invoices - appeal allowed - decided in favor of appellant. - Excise Appeal No. 31242 of 2018 - A/30513/2019 - Dated:- 15-5-2019 - SHRI P. VEN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid on reverse charge by the recipient of the service, the CENVAT credit in respect of such input service shall be allowed on or after the day on which payment is made of the value of input service and the service tax paid or payable as indicated in invoice, bill or, as the case may be, challan referred to in rule 9: Provided further that in case the payment of the value of input service and the service tax paid or payable as indicated in the invoice, bill or, as the case may be, challan referred to in rule 9, is not made within three months of the date of the invoice, bill or, as the case may be, challan, the manufacturer or the service provider who has taken credit on such input service, shall pay an amount equal to the CENVAT credit availed on such input service and in case the said payment is made, the manufacturer or output service provider, as the case may be, shall be entitled to take the credit of the amount equivalent to the CENVAT credit paid earlier subject to the other provisions of these rules: Provided also that if any payment or part thereof, made towards an input service is refunded or a credit note is received by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce tax paid as indicated in the invoice/bills has paid a reduced amount as was evident from the records. It is not in dispute that they paid the full amount of service tax as indicated in the invoice but they have not paid the full value of the input services as indicated in the invoice but deducted some amount. Therefore, they are covered by the proviso to Rule 4(7) of CCR 2004 and to that extent they are not entitled to CENVAT Credit. 6. It is the case of the appellant that they have only reduced the amount of service charges paid but they have discharged the onus to pay full amount of service tax although what is paid will be in excess of what is due as per the invoice amount actually paid. Therefore, they are entitled to the CENVAT Credit even as per Rule 4(7) of CCR 2004 as it stood post 01.04.2011. Ld. Counsel would argue that Rule 4(7) applies only in cases where any payment towards input services is refunded by the service provider or a credit note is received by the manufacturer. He would argue that a harmonious reading of Rule 4(7) and Rule 6(3) shows that Rule 4(7) is made applicable for reversal of CENVAT Credit at receiver s end so that there is no loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cular also applies to post 2011 situation where there is a conflict between the circular and statutory provision of the law, the latter prevails. He relies on the case law of Ratan Melting Wire Industries [2008(12)S.T.R. 416 (S.C)] in which the Constitutional Bench of Hon ble Supreme Court held that any circular which is issued contrary to the statutory provisions has merely no existence in law. He also relied on the order of this Bench in the case of Astra Microwave Products Limited [2016(342)ELT 300 (Tri.-Hyd.)] in which it was held that any erroneous clarification issued by the departmental officers will not entitle to the assessee to any benefit of exemption notification. He would, therefore, urge the Bench to strictly read Rule 4(7) as it stood during the relevant period along with paras therein and hold that since the appellant has not paid the amount as indicated in the invoices but has paid the reduced amount, they are not entitled to CENVAT Credit to that extent. He would urge that the assessee s appeal may therefore be rejected. 9. I have considered the arguments on both sides and perused the records. It is not in dispute that the appellant has p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 4(7), it does not appear that Rule 4(7) provides for a proportionate reduction of CENVAT Credit where the value of services rendered is reduced subsequently but service tax was discharged on the original amount and borne by the service recipient. This is consistent with the circular of the Board No. 877/15/2008-CX, dated 17.11.2008 in which the Board has clarified that where higher duty than the due is paid due to subsequent reduction in prices, credit as per invoice is available to the assessee. This is also consisted with similar circular regarding credit of service tax in Board s Circular No. 122/3/2010-ST, dt.30.04.2010. Both these circulars were, of course, issued prior to Rule 4(7) was amended w.e.f. 01.04.2011. However, this amended rule also does not provide for a proportionate reduction in CENVAT Credit where the invoice value is subsequently reduced when it is not in doubt that the service tax as per invoice has been paid by the service provider and has been borne by the service recipient. At any rate, there is no loss to the revenue and if the appellant had taken less amount as credit of service tax paid, they could have claimed refund of the remaining amount as ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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