TMI Blog2022 (1) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee therein was the recipient of service tax, the service provider was outside the country, in law he has been treated as a service provider and is levied tax, the liability to pay tax on the service which he has received was foisted on such assessee under law. In order to discharge the said liability, he is entitled to use the cenvat credit which was available with him. The special leave petitions preferred by the Revenue against M/s Aravind Fashions and Godavari Sugar Mills, though have been dismissed for low tax effect, we cannot subscribe to the arguments advanced by the Revenue in view of the fiction created under Section 68(2) of the Finance Act, 1994 read with Rules 2(1)(d) of the Service Tax Rules, 1994 and Rule 3(4)(e) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 33,30,39,951/-. 3. The Commissioner of Central Excise had issued the show cause notice dated 15.10.2007 calling upon the assessee to show cause as to why the input service tax utilized for payment of service tax on services viz., intellectual property services, commissioning and installation services and maintenance and repair services and also GRA services for the period under consideration should not be treated as irregular and recovery under Section 73 of the Finance Act, 1994, with interest and penalty should not be ordered. 4. The respondent submitted reply to the said show cause notice. The Commissioner of Central Excise and Service Tax, LTU, Bengaluru, rejecting the contentions of the respondent assessee passed the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15 (40) STR 1063 (Kar.) without analyzing the material on record. 8. Learned Counsel further submitted that in terms of Rule 3(4)(e) of the Cenvat Credit Rules, 2004, the cenvat credit can be utilized only on the output service, whereas the services on which the respondent has paid the service tax by utilizing the cenvat credit are the services rendered by the foreign company which are not the output service provided by the respondent. Similarly, GTA services being provided by the goods transporting agency and such assessee pays the service tax as the service provider are output services at the end of goods transporting agency but not at the receiving end of the recipient. Hence, utilization of cenvat credit for payment of service ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, 2004, w.e.f., 1.7.2012, which reads thus; Explanation CENVAT credit cannot be used for payment of service tax in respect of services where the person liable to pay tax is the service recipient. Admittedly, the dispute herein relates to the period from April to August, 2006. The aforesaid explanation inserted to Rule 3(4)(e) w.e.f., 1.7.2012 is not applicable to the present case. 13. Clause (p) of Rule 2 of Cenvat Credit Rules, 2004 defines output service , which reads as under; (p) output service means any taxable service, excluding the taxable service referred to in sub-cause (zzp) of clause (105) of section 65 of the Finance Act, provided by the provider of taxable service, to a customer, client, subscriber, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on as if he is the person liable for paying the service tax in relation to such service. 16. In the case of Aravind Fashions Ltd., supra, the Coordinate Bench of this Court has considered the Cenvat Credit of input services utilized by the assessee towards the payment of service tax, it has been observed that the assessee therein was the recipient of service tax, the service provider was outside the country, in law he has been treated as a service provider and is levied tax, the liability to pay tax on the service which he has received was foisted on such assessee under law. In order to discharge the said liability, he is entitled to use the cenvat credit which was available with him. 17. In Godavari Sugar Mills Ltd., supra, another ..... X X X X Extracts X X X X X X X X Extracts X X X X
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