2014 (5) TMI 465

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....objection that payment of such bills was made at discounted value. 2. Shri S.R. Dixit (Advocate) appearing on behalf of the appellant relied upon the CBEC Circular No. 877/15/2008-CX dated 17.11.2008 and Circular No. 122/3/2010-ST dated 30.4.2011 and argued that Service Tax has not been paid to the service provider proportionate to the reduced amount. It was his case that the entire service tax paid on the invoices is admissible as cenvat credit. 3. Shri Alok Srivastava, (AR) appearing on behalf of the Revenue defended the orders passed by the lower authorities. 4. Heard both sides and perused the case records.  Learned Advocate appearing on behalf of the appellant relied upon two Circulars issued by CBEC in support of his case that....

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....it Rules, 2004,             Credit in respect of input service shall be allowed, on or after the day on which payment is made of the value of input service and the service tax paid or payable as is indicated in invoice, bill or as the case may be, challan referred to in Rule 9. A doubt raised is as to whether the receiver of input service can take credit only after the full value that is indicated in the invoice, bill or challan raised by the service provider, and also the service tax payable thereon, has been paid. It has been represented that in many cases, after the invoice is issued by the service provider, the service receiver does not make the full payment of the invoiced amoun....

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....ame and the rule does not place restriction on payment through debit in the books of accounts. Therefore, if the service charges as well as the service tax have been paid in any prescribed manner which is entitled to be called 'gross amount charged' then credit should be allowed under said Rule 4(7). Thus, in the case of 'Associate Enterprises', credit of service tax can be availed of when the payment has been made to the service provider in terms of Section 67(4)(c) of Finance Act, 1994 and the service tax has been paid to the Government Account. (b) In the cases where the receiver of service reduces the amount mentioned in the invoice/bill/challan and makes discounted payment, then it should be taken as final payment towards the provisio....