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TMI Blog2021 (2) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... n import of services under reverse charge mechanism. The remaining demands contained in the four show cause notices dated October 23, 2009 for the period 2004-09, October 21, 2010 for the period 2009-10, October 04, 2011 for the period 2010-11 and November 27, 2012 for the period 2011-12 have been dropped. 2. Two issues therefore, arise for consideration in this appeal: A. Whether services provided by the sub-contractors qualify as input services for the Appellant and thus, CENVAT Credit is admissible on the invoice of the sub-contractors or not? B. Whether Appellant is eligible for CENVAT Credit on service tax paid by on import of services under reverse charge mechanism for period prior to April 18, 2006? 3. In so far as the first is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e work. A sub-contractor is essentially a taxable service provider. The fact that service provided by such sub-contractors are used by the main service provider for completion of work does not in any way alter the fact of provision of taxable service by the sub-contractor. Services provided by sub-contractors are in the nature of input services. Service tax, therefore, leviable on any taxable service provided, whether or not, the services are provided by a person in his capacity as a sub-contractor and whether or not such services are used as input services. The fact that a given taxable service is intended for use as an input service by another service provider does not alter the taxability of the service provided. 6. The Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f input services and service tax is leviable on the services provided by the sub-contractor. 16. I find in this case, it remains undisputed that the sub-contracted services received by the notice are being used for providing output services. Only allegation is that these services are not taxable and hence not qualified to be treated as input services. I find that the noticee is availing Cenvat credit on the sub-contractor services and discharging its liability on the higher value of the taxable services. Thus, I see that Department in no way has been put to the disadvantage. I find that the noticee has also contended that the allegation that entire services have been sub-contracted is also not true as some core activities like provision o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there can be no possibility of double taxation because the Cenvat Rules allow a provider of output service to take credit of the Service Tax paid at the preceding stage." 11. In view of the above, it has to be held that the Commissioner was not justified in denying CENVAT Credit to the appellant on the services received from the sub-contractor. 12. The second issue that arises for consideration is regarding denial of CENVAT credit on service tax paid by the appellant on import of service under a reverse charge mechanism for the period prior to April 18, 2006. The relevant part of the order passed by the Commissioner is reproduced below: "The assessees in their defence reply dated 26.4.2011 submitted that CENVAT credit is available in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly question to be decided by me in this appeal is whether the assessee has availed CENVAT credit wrongly as alleged in the show cause notice and whether the impugned order passed by the Commissioner (Appeals) allowing appeal of the assessee on the ground that assessee was not liable to pay service tax under the reverse charge mechanism until the introduction of Section 66A of the Finance Act, 1994. It is undisputed that service tax was paid for input services on reverse charge method (import of service in March, April, November, 2005. It is also undisputed that service tax liability on this type of service came into effect only from 18.04.2006 with the introduction of Section 66A of the Finance Act, 1994...... 3. Therefore, keeping in vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009-TRU dated 16.07.2009 and in the said circular CBEC has made it clear that there is no mistake or omission in that relevant provision of CENVAT Credit Rules, 2004 and credit of tax paid on imported services should be allowed if they are in the nature of input services. Further, in this case the tax was paid under section 66 of the Finance Act, and hence the credit is admissible to the appellant. Further, as per the department impugned order though the tax itself was not required to be paid then in that case credit is nothing but a refund of the tax erroneously paid by the appellant in their CENVAT Credit account. Further, in the case of Bajaj Allianz General Insurance (supra) the bench of this Tribunal by relying upon the judgement of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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