Case Law Details

Case Name : Srini Link Vs C.C.E & S.T. (CESTAT Ahmedabad)
Appeal Number : Excise Appeal No.10688 of 2020
Date of Judgement/Order : 19/10/2022
Related Assessment Year :

Srini Link Vs C.C.E & S.T. (CESTAT Ahmedabad)

Cenvat credit cannot be denied for service tax payment as a recipient instead of as a service provider

CESTAT find that the cenvat credit was denied to the appellant on the ground that the service tax was paid by the appellant as a recipient whereas, it was supposed to be paid by the service provider. In this regard, I find that there is no specific condition in the Cenvat Credit Rules that the cenvat credit can be allowed only when service tax is paid by the service provider. The fact is not under dispute that the appellant was received the services which was suffered service tax, the government exchequer has received the service tax amount. In such case the compliance of the Cenvat Credit Rules stand fulfilled therefore, on the ground that the appellant have paid the service tax therefore the credit is not available is absolutely incorrect in my considered view.

Service tax payment challan is a valid document for availing cenvat credit

 As regard the contention of the department that the challan through which the appellant have paid the service tax is not a valid document for availing the cenvat credit. This issue is no longer res-integra as in the various judgments, some of which are cited by the appellant. It is clearly held that the challan through which the service tax was paid is a valid document for availing the cenvat credit therefore, for this reason also the cenvat credit cannot be denied. Accordingly, the department’s allegation clearly fails on both the grounds. The judgment relied upon by the appellant directly support their case on both the grounds therefore, in my considered view the appellant have rightly availed the cenvat credit in respect of service tax paid by them on receipt and use of service.

FULL TEXT OF THE CESTAT AHMEDABAD ORDER

The brief facts of the case are that the appellant is a service recipient and paid the service tax in respect of services received from service provider whereas, the service tax liability statutorily was on the service provider. The appellant have taken the cenvat credit in respect of such service tax paid by them under reverse charge mechanism on the strength of bank challan whereby, the service tax was deposited.

1.1 The case of the department is that firstly, since the appellant was not liable to pay service tax, whatever service tax was paid is not available as cenvat credit. Secondly, the challan through which the service tax was paid is not valid document for availing the cenvat credit in view of Rule 9 of Cenvat Credit Rules, 2004.

02. None appeared on behalf of the appellant however, the appellant filed detailed submission dated 07.10.2022 and in the said submission they pray that the case may kindly be decided on the basis of this submission and grounds made therein in appeal memo. The appellant in their submission relied on the following judgments :-

  • LAXMI EXPORTS Vs CCE & ST, Surat– 2021 (44) GSTL 284 (Tri.-Ahmd)
  • CHOICE LAB LTD.- 2016 (341) ELT 604 (Guj.)
  • SYNPOL PRODUCTS LTD.- 2016 (335) ELT 697 (Tri-Ahmd)
  • MEGHALAYA CAST & IRON ALLOYS P.LTD.- 2019 (367) ELT 231 (Meghalaya)
  • KARTHIK ENGINEERS P.LTD.- 2014 (308) ELT 550 (Tri.Ahmd)
  • SDL AUTO P.LTD., FARIDABAD- 2013 (294) ELT 577 (Tri.-Del.)
  • RENAISSANCE JEWELLERY LTD.,- 2020-TIOL-1272-CESTAT-AHD
  • JAY JEE ENTERPRISES, DAMAN- 2021-TIOL-643-CESTAT-AHD
  • ASHIRWAD FOUNDARIES P.LTD.- 2020-TIOL-908-CESTAT-KOL
  • GHATGE PATIL IND LTD.- 2020-TIOL-1518-CESTAT-MUMBAI
  • M/s. KDDL LTD., BANGALORE- TOG-339-CESTAT-BANG-2019

03. Shri Vijay G. Iyengar, learned Superintendent (AR) appearing on behalf of the revenue reiterates the findings of the impugned order.’

04. I have carefully considered the submissions made by both the sides and perused the records. I find that the cenvat credit was denied to the appellant on the ground that the service tax was paid by the appellant as a recipient whereas, it was supposed to be paid by the service provider. In this regard, I find that there is no specific condition in the Cenvat Credit Rules that the cenvat credit can be allowed only when service tax is paid by the service provider. The fact is not under dispute that the appellant was received the services which was suffered service tax, the government exchequer has received the service tax amount. In such case the compliance of the Cenvat Credit Rules stand fulfilled therefore, on the ground that the appellant have paid the service tax therefore the credit is not available is absolutely incorrect in my considered view.

4.1 As regard the contention of the department that the challan through which the appellant have paid the service tax is not a valid document for availing the cenvat credit. This issue is no longer res-integra as in the various judgments, some of which are cited by the appellant. It is clearly held that the challan through which the service tax was paid is a valid document for availing the cenvat credit therefore, for this reason also the cenvat credit cannot be denied. Accordingly, the department’s allegation clearly fails on both the grounds. The judgment relied upon by the appellant directly support their case on both the grounds therefore, in my considered view the appellant have rightly availed the cenvat credit in respect of service tax paid by them on receipt and use of service.

05. The impugned order is set aside. Appeal is allowed.

(Pronounced in the open court on 19.10.2022)

Download Judgment/Order

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