TaxTMI 
TaxTMI 
2019 (5) TMI 1093
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....s for various reasons. This reduced amount was recorded in their books of accounts as income received. 4. A show cause notice dated 22.01.2016 was issued to the appellant demanding an amount of Rs. 37,93,918/- as ineligible CENVAT Credit in respect of the input services alleging contravention of Rule 4(7) of CCR 2004. Ld. Counsel for the appellant submits as an illustration if the value of the service is Rs. 100/- and service tax had to be paid @ 15%, the total invoice value is Rs. 115/-, but they credited to the service provider an amount after deducting Rs. 10/- as price reduction charges. Therefore, the service tax which was paid on the entire amount of Rs. 100/- was in excess of the amount of service tax actually required to be paid. He would submit that there is no dispute that the actual amount of service tax indicated in the invoice was paid by the service provider to the government account and by the appellant to the Service provider notwithstanding the fact that some amount has been deducted as price reduction charges. Rule 4(7) of CCR 2004 reads as follows: "(7) The CENVAT credit in respect of input service shall be allowed, on or after the day on which the in....
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....his sub-rule, it shall be recovered, in the manner as provided in rule 14, for recovery of CENVAT credit wrongly taken. Explanation III - In case of a manufacturer who avails the exemption under a notification based on the value of clearances in a financial year and a service provider who is an individual or proprietary firm or partnership firm, the expressions, "following month" and "month of March" occurring in sub-rule (7) shall be read respectively as "following quarter" and "quarter ending with the month of March. 5. This sub rule was substituted with effect from 01.04.2011 by notification No. 13/2011-CE(NT), dated 31.03.2011. The second proviso to this sub rule as above makes it mandatory for the service recipient to pay for the services as indicated in the invoice or bill within three months of the date of invoice, otherwise they have to reverse the CENVAT credit so taken. The next proviso also provides that if subsequently they pay their service provider, they will be entitled to take CENVAT credit of the amount so refunded or credited. It is the case of the Revenue in the show cause notice, the Order-in-Original and the impugned order that the appellant has not....
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....e credit would also be altered accordingly." He also relies on the following case laws: (a) CCE Udaipur vs. Hindustan Zinc Ltd. [2019 (4) TMI 480-CESTAT-DELHI] (b) Hindustan Zinc Ltd.vs. CCE Udaipur [2018 (3) TMI 1187-CESTAT-DELHI] (c) Ananthnath Developers vs. CCE Raigad [2018 (6) TMI 1082 (CESTATMUMBAI] (d) CCE Jaipur vs. Hindustan Zinc Ltd. [2014 (34) STR 440 (Tri.-Del.)] (e) Patel Air Freight vs. CCE Vadodara [2014 (35) STR 529 (Tri.-Ahmd.] (f) CCE vs. MDS Switchgear Limited [2008 (229) ELT 485 (SC)] 7. He would, therefore, urge that the impugned order is not correct and may be set aside and their appeal may be allowed. 8. Countering the arguments of Ld. Counsel, Ld. DR would submit that the Board circular dt. 30.04.2010 relied upon by Ld. Counsel should not apply to this case because it pertains to the legal situation prior to 01.04.2011 when Rule 4(7) of CCR 2004 has been amended. He would also argue that even if a circular has been issued by the Board, that should not bind this Tribunal. He would further submit that assuming for argument's sake that the circular also applies to post 2011 situation where there is a c....
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....borne the full burden of the excess service tax paid by them. They have also taken credit of the excess service tax. An alternative could have been for the appellant to seek refund of the excess amount of service tax paid as the persons who bore the burden of excess service tax. 10. What the department proposes is a proportionate reduction in CENVAT Credit availed by the appellant in view of the reduced payment of the value of services rendered. A plain reading to proviso to Rule 4(7) shows that if a payment for the invoice is not made within three months, the assessee has to refund the CENVAT amount thereof and if a part payment is made, to that extent they can take credit. It is not the case here that the appellant has not paid the amount, they have paid the amount for the services rendered at a reduced rate and have paid the full amount of service tax which was paid by the service provider (which is not excess considering the reduced value of the services), the question is whether a proportionate amount of CENVAT credit can be reduced under such circumstances. From a plain reading of Rule 4(7), it does not appear that Rule 4(7) provides for a proportionate reduction of CENVAT....