TMI Blog2020 (2) TMI 1204X X X X Extracts X X X X X X X X Extracts X X X X ..... he Cenvat credit for payment of service tax on reverse charge basis. Rule 5 of the Taxation of Service (Provided from Outside India and Received in India) Rules, 2006 prohibits only for availing of Cenvat credit and not for utilizing the Cenvat credit to discharge its service tax obligation on reverse charge basis. The period involved in this Appeal is from April, 2008 to March,2011 whereas the prohibition as per the notification dated 20.6.2012 regarding the utilization of the Cenvat credit by way of amendment in Rule 3(4) ibid, is effected from 1.7.2012 only, therefore during the period in issue the Appellants i.e. the service recipient were very well within their rights to discharge the service tax liability on reverse charge basis by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice dated 21.11.2013 was issued to them proposing to demand and recover Service Tax amounting to ₹ 5,36,752/- for the period 2008-09 to 2010-11. The Adjudicating Authority vide Order-in-Original dated 30.03.2015, confirmed the demand of ₹ 5,36,752/- along with interest under Section 75 and appropriated the amount of ₹ 86,111/- and imposed equal penalty under Section 78 and also imposed penalty of ₹ 5,000/- under Section 77 of the Finance Act, 1994. 4. The learned Chartered Accountant appearing on behalf of Appellant submits that in terms of Rule 3(4) of CCR, 2004, Cenvat Credit can be utilized for payment of tax on output services and explanation to Rule 2(p) ibid clarified that if a person liable for paying serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed order and prays for dismissal of Appeal. 5. I have heard learned Chartered Accountant and learned Authorised Representative and have gone through the case records including the synopsis as well as the decisions cited by the respective sides during the course of hearing. I have gone through the decision of the Hon ble High Court in the matter of M/s. U.S.V. Ltd. (supra) and in my view the issue involved in this Appeal is no more res integra in view of the aforesaid decision of the Hon ble High Court. The relevant paragraphs of the said decision is extracted as under:- 6. The view taken by the Tribunal in respect of Rule 3(4) of the Cenvat Credit Rules, 2004 now stands concluded against the revenue by the decision of the Gujrat Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estriction provided in Rule 5 of the above rules is that the taxable services received from outside India shall not be treated as output services for availment of tax paid on any input services. However, there is no bar to utilizing of Cenvat credit already availed to discharge service tax obligation on the import of services on reverse charge basis. This view is further supported by the fact that on 20th June, 2012 the Cenvat Credit Rules, 2004 were amended so as to introduce an explanation which bars utilization of Cenvat credit to meet obligation of tax on output service on reverse charge basis. Similar issue also came up before the Hon ble High Court of Delhi in the matter of Mccann Erickson (India) Ltd. vs. Pr. Commr. of GST C. EX ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated outside India and received by a recipient located in India, the Indian recipient is, by virtue of Rule 2(1)(d)(iv) of the Service Tax Rules, defined as the person liable for paying Service Tax . (vi) The Indian recipient of the service also, therefore, becomes the person liable for paying Service Tax , under the Cenvat Credit Rules. (vii) The Indian recipient of the Taxable Service also, consequently, becomes the provider of Taxable Service , as defined in Rule 2(r) of the Cenvat Credit Rules. (viii) Rule 3(4) of the Cenvat Credit Rules permits Cenvat credit to be utilised for payment of Service Tax on any Output Service is defined, in Rule 2(p) of the Cenvat Credit Rules as service provided, by a provider of Taxable Serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved in this Appeal is from April, 2008 to March,2011 whereas the prohibition as per the notification dated 20.6.2012 regarding the utilization of the Cenvat credit by way of amendment in Rule 3(4) ibid, is effected from 1.7.2012 only, therefore during the period in issue the Appellants i.e. the service recipient were very well within their rights to discharge the service tax liability on reverse charge basis by utilizing the Cenvat Credit. There is no need for me to take up the issues of limitation or penalty since on merits I am convinced and am allowing the Appeal. 6. Accordingly, in view of the discussions made hereinabove as well as the decisions cited supra the impugned order is set aside and the Appeal is allowed with consequential ..... X X X X Extracts X X X X X X X X Extracts X X X X
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