Case Law Details
Sahara India TV Network Vs C.C.G.ST. (CESTAT Mumbai)
The issue to be decided is Whether the Appellant i.e. the service recipient could utilize Cenvat credit of Central Excise duty paid on inputs, for payment of service tax on services viz. Management, Maintenance or Repair, Copyright and Advertising, received by them from abroad, under reverse charge mechanism?
It is settled that once the assessee in terms of Rule 2(q) r/w Rule 2(1)(d)(iv) ibid, is liable to pay service tax then he also becomes a provider of taxable service under Rule 2(r) and consequently becomes a provider of output service under Rule 2(p) ibid and becomes entitle to utilize the 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 utilizing the Cenvat Credit. There is no need to take up the issues of limitation or penalty since on merits CESTAT convinced and allowing the Appeal.
Accordingly, in view of the discussions made herein above the impugned order is set aside and the Appeal is allowed with consequential relief, if any.
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