2024 (6) TMI 168

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....Technology Software Service', 'Management Consultants Service', 'Business Auxiliary Service' during the relevant period. Alleging that they had wrongly utilized CENVAT Credit in discharging their service tax liability under Reverse Charge Mechanism during the period December 2010 to March 2011 and also availing inadmissible CENVAT Credit on various input services, show cause notice was issued to the appellant on 23.04.2012 for recovery of the service tax amounting to Rs.14,36,72,226/- and CENVAT Credit of Rs.2,60,66,700/- with interest and proposal for penalty. On adjudication, the entire demand of service tax of Rs.14,36,72,226/- was confirmed with interest and penalty; and part of CENVAT Credit amounting to Rs.25,99,085/- was confirmed wi....

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....oner. Further, he has submitted that the CENVAT Credit of Rs.25,99,085/-availed by the appellant on various input services needs to be verified in the light of the caselaws submitted and documentary evidences produced by the appellant during the course of adjudication proceedings. 5. Heard both sides and perused the records. 6. The issues involved in the present appeal for determination are : (i) whether service tax paid by the appellant on tax on Reverse Charge Mechanism basis by utilizing CENVAT Credit for the period prior to 01.04.2011 is valid; and (ii) CENVAT Credit on various input services claimed to have been used in providing output services amounting to Rs.25,99,085/- is admissible. 7. As regards the first issue concerned, w....

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.... 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 credit. The Tribunal in the case of M/s Kansara Modler Lt....

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.... India under section 66A of the Act, the recipient of such service; 6. If we read Rule 2(q) of Cenvat Credit Rules with Rule 2(1)(d)(iv), we find that appellant is a person liable to Service Tax. Once appellant is person liable to service tax, he becomes provider of taxable service under Rule 2(r) and consequently becomes output service provider under Rule 2(p) of the Cenvat Credit Rules. Revenue is also relying on Rule 5 of Taxation of Services (Provided from Outside India and Received in India) Rules. We find that Rule 5 refers to availing of Cenvat credit and not to utilization of credit. We are therefore of the view that the finding of the Commissioner not treating the appellant as output service provider, is not correct and accordin....