9911796707
TMI Blog2021 (9) TMI 1201X X X X Extracts X X X X X X X X Extracts X X X X ..... service provider is supposed to pay the service tax on 25% of the value of the service and service recipient is required to pay the service tax on 75% of the value of the service. The contention of the revenue is that as per Proviso to Rule 4 (7) of Cenvat Credit Rules, 2004 credit of service tax paid by the recipient shall be allowed only if the service tax is paid by the recipient as a person liable to pay the service tax. The contention of the revenue is that in the present case even the portion of the service tax which is liable to be paid by the service provider was also paid by the service recipient, therefore, the appellant is not eligible for the Cenvat credit. Being aggrieved by the impugned order the appellant filed the present ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax is liable to be paid by the recipient of service, credit of service tax payable by the service recipient shall be allowed after such service tax is paid." 3.1 He argued that as per the said proviso, eligibility of the credit is decided only when the service tax is paid by the person who is liable to pay. In the present case the entire service tax supposed to be paid by the service provider but in fact the service tax was paid by the recipient therefore there is a violation of the proviso to Rule 4 (7). Accordingly, the lower authorities have rightly denied the Cenvat credit. 4. I have carefully considered the submission made by the both the sides and perused the record. I find that there is no dispute that the service tax was indeed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vat credit of the duty of excise specified in the First Scheduler to the Excise Tariff Act. Rule 4 of the Cenvat Credit Rules, 2004 lays down the conditions for allowing Cenvat credit. Sub-rule (1) thereof provides that Cenvat credit in respect of inputs may be taken immediately on receipt of the inputs in the factory of the manufacturer or in the premises of the provider of output service. Proviso to sub-rule (1) puts certain limitations on such immediate availability of Cenvat credit. We are however, not concerned with the proviso. 8. In terms of Rules 3 and 4 of the Cenvat Credit Rules, 2004, a manufacturer would be entitled to avail the Cenvat credit in respect of the inputs used for the manufacture of a final product or in providing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, not done. Valuation was duly approved and the payment of duty was also accepted. The Tribunal further observed that We find absolutely no substance in the attempt of the learned Commissioner to convert a part of the duty so paid into deposit of duty. There is no legal basis for such presumption. The rules entitled the receipt manufacturer to avail of the benefit of the duty paid by the supplier manufacturer. A quantum of duty already determined by the jurisdictional officers of the supplier unit cannot be contested or challenged by the officers in charge of recipient unit." 6. In view of the above principle and applying the same to the facts and circumstances of the case, I do not fine any merit in the impugned order. Consequently, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice provider, however, initially the entire amount of service tax was paid by the service provider and later recovered from the appellant by indicating the same in the invoice. I find that the amount which the service provider paid whether to be consider as a deposit or service tax for deciding the eligibility of credit has been more or less settled by the Hon'ble Gujarat High Court in Nahar Granites Ltd. (supra), their lordships observed as under: "7. Rule 3 of the Cenvat Credit Rules, 2004 allows a manufacturer or producer of final product or a provider of taxable service to take Cenvat credit of the duty of excise specified in the First Scheduler to the Excise Tariff Act. Rule 4 of the Cenvat Credit Rules, 2004 lays down the conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch duty cannot be declined to the purchaser of the goods who otherwise fulfilled all conditions tor availing Cenvat credit thereof. 9. Case is substantially similar to one before the Supreme Court in case of MDS Switchgear Ltd. (supra). In the said case, the Tribunal while accepting the department's allegation of inflation of the value of intermediate goods to load the assessable value, observed that if the department was of the opinion that the value of the final product was depressed, it could have charged the original manufacturer unit in under-invoicing their product. This was however, not done. Valuation was duly approved and the payment of duty was also accepted. The Tribunal further observed that We find absolutely no substance in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
