2018 (4) TMI 617

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....ssued show cause notices dt. 23.01.2012 for the period 30.11.2007 to 31.03.2011 and show cause notice dt. 12.01.2012 for the period 2011 - 12 alleging that the Appellants have contravened the provisions of Section 66A and Section 68 of the Finance Act 1994, Rule 6 of Service tax Rules 1994 and Rule 3 (4) of Cenvat Credit Rules, 2004 in as much as they have paid the service tax on import of service through Cenvat Credit account which the assessee is not eligible in terms of Rule 5 of Taxation of Services (Provided form Outside India and received in India) Rules, 2006 and therefore it amounts to non-payment of tax. The show cause notices proposed demand of Service tax amounting to Rs. 3,71,03,693/- and Rs. 1,64,13,567/- from the Appellant in ....

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....iding import services only and there is no bar in utilizing the cenvat credit for paying service tax on imported services by the Appellant. That the Circular No. b1/4/2006 - TRU dt. 19.04.2006 issued by the CBEC clarifying that services provided from outside India will not be treated as taxable service provided by the recipient is not applicable as it is not present in the case as it is contrary to the Act and the rules. He also submits that the whole case is revenue neutral as whatever service tax is being paid by them is available as credit to them. He relies upon the Tribunal order in case of Kansara modler Ltd. 2013 (32) STR 209 (TRI), Tata AIG Life Insurance Co. Ltd & Othrs. 2013 (32) STR 209 (TRI) and Aksh Technologies Ltd. 2012 (42) ....

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....66A. In terms of Rule 2 (r) the Appellant is a deemed service provider. Rule 5 of Taxation of Service Rules (Provided from outside India and Received in India) Rules only refers to availing of Cenvat Credit and not utilization of cenvat credit. Further the restriction to utilize the cenvat credit came into Cenvat Credit rules by inserting explanation in rule 3 (4) vide Notification No. 28/2012 - CE (NT) dt. 20.06.2012 which reads as under : Explanation. - CENVAT credit cannot be used for payment of service tax in respect of services where the person liable to pay tax is the service recipient" 5. We thus find that before 20.06.2012 there was no restriction upon the deemed service provider to pay the service tax liability from cenvat cr....