TaxTMI 
TaxTMI 
2016 (12) TMI 268
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.... in respect of certain input services received by them during the period from April 2009 to December 2009. The respondent in terms of their contract with the service providers, while making payment to the service providers against the invoices raised by them, retained a percentage of the billed amount towards performance guarantee which was being paid subsequently after certain period. The invoices raised by the service providers show payment of service tax on full invoice value and this is not disputed. The respondent in this case, while not making full payment of the billed amount and retaining with them a part of the amount billed by the service providers as performance guarantee, took Cenvat credit of full amount of service tax shown on....
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....ince the service tax has been paid by the service providers on the full invoice value including the amount not received by them, they (respondent) may be allowed its Cenvat credit. However, this plea was not accepted by the Assistant Commissioner observing that even if the entire input service is received and the service tax on the entire value of service is paid by the service provider, the service tax credit to the extent which is proportionate to the value of the service not paid by the assessee is clearly not admissible in terms of Rule 4 (7) of the Cenvat Credit Rules. 1.2 The period involved in all the appeals is as under: E/981/11 Hindustan Zinc Ltd. March, 2007 to January, 2008 Credit Rs. 16,64,575/- Penalty Rs. 16,64,575/- E/....
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....nal upheld. 5. Learned advocate takes support from earlier order passed in appellants own case. 6. I have considered the submissions from both the sides and perused the facts on record. I find that in the decision cited by the learned advocate, the Tribunal has held that cenvat credit will be eligible to the respondent even though the part of the payment due to the service provider has been held by the respondent. The decision which is on identical facts will be applicable to the present case as well. The Tribunal therein held as under: "6. The stand of the respondent is that the service providers had paid service tax on the entire invoice value, even though full payment had not been made by the respondent to the service providers and a....
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....period. Due to these reasons the value paid may not tally with the amount indicated in the invoice, bill or challan. In such cases the department has raised objections to the taking of credit as it does not meet the requirement of the said sub-rule (7). 4. Thus the following issues relating to availment of Cenvat credit need clarification, - whether Cenvat credit can be claimed (a) when payments are made through debit/credit and debit/credit entries in books of account or by any other mode as mentioned in Section 67 Explanation (c) for transactions between associate enterprises ; or (b) where a service receiver does not pay the full invoice value and the service tax indicated thereon due to some reasons. 5. Matter has been examine....