Service tax credit entitlement under amended rules upheld despite objection that input and output services were different categories.

Service tax credit was allowable for the relevant half-year because the claim arose after the 14-05-2003 amendment to the Service Tax Credit Rules, 2002, and the amended position governed the assessee's entitlement. Credit could not be denied merely on the ground that the input service and output service were not in the same category. The records were examined and found sufficient to support the credit claim, and the Revenue's objection to the appellate re-examination of those records was rejected. The operative effect was that the amended legal position permitted the credit and the Revenue's challenge failed.

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Issues: Whether the assessee was entitled to service tax credit on input service for the relevant period after the amendment to the Service Tax Credit Rules, 2002, and whether such credit could be denied on the ground that the input service and output service were not in the same category.

Analysis: The relevant return and the credit claim related to the half-year ending 30-09-2003, which fell after the amendment made on 14-05-2003. On the record, the Commissioner (Appeals) had examined the documents and was satisfied that the credit was allowable. The Revenue's objection that the Commissioner could not re-examine the records afresh was not accepted, and no infirmity was found in allowing the credit on the basis of the amended legal position.

Conclusion: The credit was held to be allowable to the assessee for the relevant period, and the Revenue's challenge failed.

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