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of <h1>Challenges on CENVAT Credit Denial Under Reverse Charge Mechanism: Tribunal Rules in Favor</h1> <h3>M/s Moog Controls India Pvt Ltd Versus Commissioner Of Central Tax, Bangalaluru South Commissionerate</h3> M/s Moog Controls India Pvt Ltd Versus Commissioner Of Central Tax, Bangalaluru South Commissionerate - TMI Issues:- Utilization of CENVAT credit for payment of Service Tax under RCM- Denial of CENVAT credit on input servicesAnalysis:Utilization of CENVAT credit for payment of Service Tax under RCM:The appeal challenged an order upholding the denial of CENVAT credit for Service Tax payment under Reverse Charge Mechanism (RCM) and penalties imposed. The appellant, engaged in various services, availed CENVAT credit but faced allegations of wrongly using it for Service Tax on imported Information Technology Software Service and on ineligible input services. The Original Authority confirmed the demand, which the Commissioner (Appeals) upheld. The appellant argued that pre-2012, there was no restriction on CENVAT credit utilization for RCM Service Tax payment, citing relevant case laws like Plansee India High Performance Materials Pvt. Ltd. v. CCT. The Tribunal found in favor of the appellant, citing precedents and the absence of restrictions pre-2012. The impugned order was set aside, except for July 2012, where cash payment was required.Denial of CENVAT credit on input services:The appellant also contested the denial of CENVAT credit on certain input services, arguing their eligibility based on precedents like Rakindo Kovai Township Ltd. v. CGST & CE. The Tribunal agreed, noting the nexus between the input services and output services. The Tribunal highlighted the insertion of an Explanation to Rule 3(4) of CCR, 2004 in 2012, restricting CENVAT credit use for Service Tax payment where the service recipient is liable. However, as the case pertained to the period before this amendment, the Tribunal allowed the appeal, except for July 2012, where cash payment was mandated. The impugned order was set aside, and the appeal was partly allowed based on the cited precedents and legal arguments.This detailed analysis of the judgment showcases the issues, arguments presented by both parties, relevant legal provisions, and the Tribunal's reasoning leading to the decision in favor of the appellant on both issues raised in the appeal.
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