Appellant not liable for interest on Cenvat credit; Appeal allowed.

The Appellant was found not liable to pay interest under Rule 14 for availing Cenvat credit before full payment of value as per the invoice issued by the service provider. The Member (Judicial) considered that since the service tax amount was paid initially along with partial payment upon invoice receipt, and as per the Board's circular, credit could be availed once the service tax was paid, no interest was chargeable. The impugned order was set aside, and the appeal was allowed, with the Cross-objection filed by the Revenue being disposed of accordingly.

---

---

Issues involved: Liability to pay interest under Rule 14 for availing cenvat credit before full payment of value as per invoice issued by service provider.

Analysis:
1. The Appellant contended that despite withholding a part of the basic service charges, they had paid the entire service tax amount to the service provider, thus arguing that Rule 7 of Cenvat Credit Rules did not apply. They cited Circular No. 122/03/2010-ST and relied on judgments like Hindustan Zinc Ltd Vs Commissioner, C.C. Jaipur Vs Hindustan Zinc Ltd, and a Commissioner (Appeals) order in the case of M/S Wellspun Maxsteel Ltd.

2. The Ld. Asst. Commissioner for the Revenue reiterated the findings of the impugned order.

3. The Member (Judicial) considered the submissions and grounds of appeal. The main issue was whether the Appellant was liable to pay interest on input services for which partial payment towards service charges was made later, while taking credit at the time of service receipt. The Member noted that although the service charges were partially paid later, the service tax amount was paid initially along with the partial payment upon invoice receipt. The Board's circular clarified that once the service tax was paid, the assessee could avail credit. The Tribunal had previously addressed a similar issue in Hindustan Zinc Ltd.'s case. The Commissioner had also ruled in favor of the Appellant in the case of M/S Wellspun Max Steel Ltd, stating that upon full payment of service tax, the recipient could avail credit. Therefore, it was concluded that no interest was chargeable as the credit was not taken before it was due.

4. The impugned order was set aside, and the appeal was allowed. The Cross-objection filed by the Revenue was also disposed of accordingly.

---