2026 (3) TMI 1070

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....al Commissioner of Service Tax, Chennai, and Order-in-Original No. 97/2018-CH.N.GST dated 09.10.2018 passed by the Principal Commissioner of GST & Central Excise, Chennai North Commissionerate. 2. The appellant, a non-banking financial company engaged in automobile financing, consumer loans, and loans against securities, is registered for various taxable services including "Banking and Other Financial Services". During audit, it was noticed that the appellant availed CENVAT credit of service tax paid under reverse charge on services provided by 'recovery agents' and, in terms of Rule 6(3B) of the CENVAT Credit Rules, 2004, reversed 50% of the credit monthly. Following the amendment to the definition of "input service" with effect from 01....

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....ance with Rule 6(3B) of the CENVAT Credit Rules, 2004, the Appellant reversed 50% of the credit. D. The Adjudicating Authority, by the impugned order, disallowed the CENVAT credit on recovery agent services, on the ground that such services did not qualify as "input services" under Rule 2(l) of the Credit Rules during the relevant period. E. This finding, recorded in paragraph 14 of the impugned order, relied on a stay order of the Hon'ble Tribunal in Bajaj Finance Limited v. Commissioner of Central Excise, Pune I. The said stay order was subsequently decided in favour of the assessee. F. The Appellant submits that the issue is squarely covered in its favour by the following Tribunal decisions, which uphold the ad....

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....e under dispute, it is necessary to refer to the relevant portion of the definition of "input service" under Rule 2(l) of the Credit Rules, as substituted by Notification dated 01.03.2011 with effect from 01.04.2011. Definitions for both the periods are reproduced below. With effect from 01.04.2011 "2(l) "input service" means any service,- (i) used by a provider of output service for providing an output service; or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes services used in relation to modernization, renovation or repairs of a factory, premises of prov....

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....asis supplied) Hence 'Input service' either prior to 01.04.2011 or w.e.f. 01.04.2011 means any service used by a provider of taxable service for providing an output service. We find that there has been no change to the 'means' part of the definition, while changes have been made in the 'includes' portion of the said provision, with effect from 01.04.2011. 6. The question then is whether the services of recovery agent, qualifies as 'input services' under Rule 2(l) of the Credit Rules after the amendment to the definition of 'input service' w.e.f. 01.04.2011. 7. We note that under the main definition, "input service" means any service used by a provider of taxable service for providing an output service. The test, therefore, is wheth....