Ericsson India Pvt. Ltd. Vs Commissioner of Service Tax (CESTAT Chandigarh)
CESTAT Chandigarh held that the assessee is entitled to cenvat credit of service tax paid under reverse charge mechanism on the services received from Foreign Service provider prior to 18.04.2006.
Facts-
The appellant is engaged in providing the taxable services. During the relevant period, the Appellant being the service recipient paid Service tax as per Rule 2(1)(d)(iv) of Service Tax Rules, 1994. The Service tax so paid by the Appellant was availed as Cenvat credit and was utilised for discharging its output Service tax liability.
During the audit proceedings, it was observed that the noticee had paid service tax on import of services during the relevant period and had availed and utilized the cenvat credit of the same. Thereafter, the Show Cause Notice was issued to the Appellant proposing to recover CENVAT credit along with applicable interest and penalty on the ground that the Appellant paid service tax u/s. 66A of the Act on behalf of the foreign service provider as recipient of service and therefore, the Appellant cannot be considered as an output service provider and accordingly, not eligible to avail credit under Rule 3(1) and Rule 3(4) of the Cenvat Credit Rules.
Adjudicating Authority vide the impugned order, granted partial relief to the appellant. Being aggrieved, the present appeal is filed.
Conclusion-
Held that in the present case, the only issue to be decided by this Tribunal is whether the appellant is eligible for cenvat credit on service tax paid on import of services under reverse charge mechanism for the period prior to 18.04.2006. This issue is no more res-integra and has been considered by various benches of the Tribunal and it has been consistently held by the Tribunal that the assessee is entitled to cenvat credit of service tax paid under reverse charge mechanism on the services received from Foreign Service provider prior to 18.04.2006.
Invocation of extended period of limitation is not justified because the appellant has not suppressed any material fact from the department and was subject to regular audit and has been regularly filing monthly service tax returns with the department. Therefore, the invocation of extended period is not justified in the facts and circumstances of this case.
FULL TEXT OF THE CESTAT CHANDIGARH ORDER
The present appeal is directed against the impugned order dated 15.10.2012 passed by the Commissioner (Adjudication) Service Tax, New Delhi whereby the Ld. Commissioner has confirmed the demand of Rs. 6,73,96,506/- under proviso to Section 73(1) of the Finance Act, 1994 read with Rule 14 of the Cenvat Credit Rules, 2004 along with interest and also imposed penalty under Section 76, 77 and 78 of the Finance Act, 1994.
2. The brief facts of the case are that the appellant is engaged in providing the taxable services under the category of Consulting Engineers Service, Maintenance and Repair Services, Erection, Commissioning and Installation and Information Technology Services to its customers, they are availing cenvat credit of service tax paid on input services used for providing output services as per Cenvat Credit rules, 2004 and is registered with the department for the said services.
