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TMI Blog2022 (1) TMI 449X X X X Extracts X X X X X X X X Extracts X X X X ..... for reversal of cenvat credit on the amount written off as bad debts and on advertisement & sales promotion services. 2. The facts of the case are that the appellant is engaged in providing banking and other financial services, credit card, debit card etc. and business support services. The appellant received various input services for providing their output services and availed cenvat credit thereon. In some cases, the appellant could not recover certain payments from their customers and wrote them off as bad debts in their financial records. The appellant also entered into a co-brand credit card agreement dated 14.10.2005 with Indian Railway Catering and Tourism Corporation Limited ("IRCTC") to launch co-brand credit card. The appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of Rule 2(l) of the Cenvat Credit Rules, 2004 was satisfied and there is no provision in Cenvat Credit Rules, 2004 which provides for reversal of credit in the event of non-payment of service tax as a result of non-receipt of consideration, therefore, the said credit is not required to be reversed. 4.2 He further submitted that the credit availed on the input services received from IRCTC was also allowed. The said order has been accepted by the Department, therefore, the Department cannot take contrary view. Apart from this, he submitted that the appellant is entitled to avail cenvat credit on input services even if the payment is not recovered from the customers. 4.3 He further submitted that prior to 01.04.2011, the appellant was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tainable. 4.5 He further submitted that the denial of cenvat credit availed on advertisement services received from IRCTC is incorrect as the adjudicating authority has held that the appellant has not furnished any proof of advertisement in nature of services received from IRCTC. However, the appellant provided the invoices raised by IRCTC and the Certificate dated 15.07.2014 issued by IRCTC clarified that the agreement was for new registration, renewal, redemption and transaction of co-brand credit cards. These documents clearly establish that IRCTC provides advertisement services by displaying appellant's credit cards on its website, advertisements etc and was accordingly receiving a consideration. Nowhere in any communication/invoice fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e customers, hence, income was written off/derecognized by the appellant in the books of accounts, in compliance of the "Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007" issued by the RBI. It is his submission that the said norms prescribed all recoverable dues pending for more than 180 days should be declared as NPA. Till June 2011, the appellant was required to pay service tax on receipt. The bills were raised after the closure of billing cycle and the service recipient was allowed at least 15 days to clear the bills. The period of 180 days would be calculated from the said due date, which would be mid August. Thus, only those dues which were unpaid till mid February 2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of Section 65(105) of the Finance Act, 1994. Then, how can credit be allowed to be retained on services on which no consideration has been received in the subject case. 5.5 He further submitted that the cenvat credit is Government money, temporarily entrusted to an assessee on the assurance and for the sole purpose of utilizing the same for discharging Central Excise duty or Service Tax which accrues to the Government. The assessee becomes eligible to keep it in its books of accounts after meeting a wide variety of conditions and maintaining/retaining the records/documents. Still, the same remains Government's money in temporary custody of the assessee. This is very clearly brought out when we examine Rule 11 of the Central Credit Rules, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rule 2(l) of the Cenvat Credit Rules, 2004 and is a provider of output service. Therefore, in terms of Rule 3 of the Cenvat Credit Rules, 2004, we hold that the appellant is entitled to avail cenvat credit on input services in question. Further, we hold that there is no such provision in the Cenvat Credit Rules, 2004 or in the Finance Act, 1994 for reversal of cenvat credit for the services provided for which no consideration for service provided is received by an assessee. Therefore, we hold that the appellant has correctly availed the cenvat credit on input services although the amount of non-recoverable taxable service has been written off by the appellant for the period prior to 01.04.2011. The appellant has admitted at bar that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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