Appellant entitled to Cenvat credit despite paying entire service tax, aligning with tribunal decisions.

The appellant, a service recipient, paid the entire service tax instead of the prescribed division with the service provider. The court held that despite this deviation, the appellant is entitled to Cenvat credit as long as the tax is paid, aligning with established tribunal judgments. The Member allowed the appeal, emphasizing that payment of service tax, irrespective of the liable party, warrants credit eligibility. The decision was supported by prior judgments, settling the issue in favor of the appellant and setting aside the denial of Cenvat credit.

---

---

Issues involved: Determination of entitlement to Cenvat credit in respect of Service Tax paid on Man Power Supply, Recruitment Agency Service, and Security Service under Reverse Charge Mechanism when the appellant, as a service recipient, paid 100% of the service tax, contrary to the prescribed 25% and 75% division between service provider and recipient, respectively.

Analysis:
1. The issue at hand revolves around whether the appellant is eligible for Cenvat credit despite paying the entire service tax as a service recipient, which was supposed to be divided between the service provider and recipient as per Notification No. 30/2012-ST. The revenue contends that under Rule 4(7) of Cenvat Credit Rules, credit is allowed only if the recipient pays the service tax as a person liable to pay it. The appellant challenged this denial of credit through the present appeal.

2. The appellant's counsel argues that the actual liability to pay service tax is immaterial as long as the tax has been paid on the input service, citing various tribunal judgments supporting this stance. The counsel's reliance on precedent cases like Petro Carbon & Chemical (P.) Ltd. and Omori India Pvt. Ltd. emphasizes the consistent interpretation that payment of service tax, even by the recipient, entitles them to Cenvat credit.

3. On the contrary, the revenue, represented by the Superintendent, reiterates the proviso to Rule 4(7) which mandates credit eligibility only when the service tax is paid by the liable person. In this case, since the recipient paid the entire tax meant to be paid by the service provider, it is argued that the appellant does not meet the conditions for claiming Cenvat credit.

4. The Member (Judicial) scrutinizes the facts and acknowledges that the appellant, as a service recipient, indeed paid the service tax, even though it was the service provider's responsibility. The Member opines that irrespective of the liable party, if the tax is paid, the recipient should not be denied Cenvat credit, aligning with established tribunal judgments supporting this interpretation.

5. The Member's analysis aligns with precedents like Omori India Pvt. Ltd., emphasizing that even if the service tax was meant to be paid by another party, the credit cannot be denied if the tax was paid. Citing relevant principles, the Member concludes that the impugned order denying Cenvat credit is not sustainable, thereby allowing the appeal with appropriate relief as per law.

6. Drawing from the principles established in prior judgments like Transpek Silox Industries Pvt. Ltd. and Gurudev Dyestuff (India) Pvt. Ltd., the Member further solidifies the decision to set aside the impugned order, emphasizing that the issue has been settled in favor of the assessee. Consequently, the appeal is allowed based on the consistent interpretation that payment of service tax, regardless of the liable party, entitles the recipient to claim Cenvat credit.

---