Clarification regarding payment of service tax under RCM

[VAMSI KRISHNA]

Dear All,

If service provider/ manufacture is liable to pay service tax under reverse charge mechanisum, then he should discharge his liability in cash ( without using CENVAT credit ).

My query is what provision/entry/notification specifies/ supports the above statement ????????

Thanks in advance

AI Summary

Cenvat credit prohibition on reverse charge: recipients must pay service tax in cash, not from credit.
Service recipients liable to pay service tax under the reverse charge mechanism must discharge that liability by cash and cannot utilize CENVAT credit for such payments; this clarification was effected by an Explanation inserted into the Cenvat Credit Rules, 2004 by Notification No. 28/2012 Central Excise (N.T.), dated 20/06/2012, which specifies that CENVAT credit cannot be used where the person liable to pay tax is the service recipient.