2018 (12) TMI 857

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....ring the Financial Year 2003-04 to 2006-07, have availed "Management Consultancy Service" provided from outside India and received by them in India, and have paid service tax under reverse charge mechanism, amounting to Rs. 52,82,775/- as per the provisions of Section 66A of the Finance Act, 1994, and have taken cenvat credit of service tax amounting to Rs. 42,30,564/-. The show cause notice dated 14.10.2008 was issued to the respondent assessee alleging that Rule 3 of the Cenvat Credit Rules, 2004 did not allow availment of cenvat credit towards payment of service tax under reverse charge mechanism. The ld. Adjudicating Authority vide Orderin- Original dated 29.01.2010 dropped the proceedings initiated vide the show cause notice. Hence, Re....

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.... Authority ought to have verified each and every invoice, which he failed to do so. Ld. Advocate strongly argued that the department has not challenged that part of the impugned order which has allowed credit of service tax paid under reverse charge mechanism. He made the Bench go through Rule 6(3) (c ) of Cenvat Credit Rules, 2004 and the Circular No.137/203/2007-CX-4 dated 01.10.2007 and relied upon various decisions in support of his submissions. 4. Heard both sides and perused the appeal records. 5. We find that the Ld. Adjudicating Authority allowed utilization of Cenvat Credit of service tax paid under reverse charge mechanism by relying on the Circular F.No.354/148/2009-TRU dated 16.07.2009. It is the case of the assessee that ....

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....services are used in relation to the entire activities of the service provider and cannot be co-related or apportioned with any individual service (whether taxable or exempted) provided by such service provider. For example service tax paid on construction of an office of a service provider (who provides more than one service) cannot be linked with any particular service provided by him as it may be using it for various purposes and for all services provided by him. Thus, these services are similar in nature to capital goods which is a part of fixed assets/cost that cannot be apportioned for maintaining separate records. It is for this reason that there is no restriction in taking and utilization of credit on these services, so far as they ....