By TIOL News Service

CHENNAI, JUNE 23, 2016: IN the course of provision of service certain amount receivable from the recipient of service could not be realized. Revenue is of the view that since the consideration for the output service was not received, Cenvat credit is to be reversed proportionately.

After hearing both sides, Tribunal held:

++ when there is no mandate of the statute to direct reversal of the Cenvat credit already availed in respect of the Output Service provided and the consideration thereof not realised for which such receivable amount is written off as bad debt, the appellant cannot be directed to reverse proportionate Cenvat credit. Law is well settled that where tax paid has gone into the treasury, appellant is entitled to credit thereof unless and until the allegation of fraud comes out. That is not the case in the present appeal. Therefore, the proposition of the appellant holds good in law following the judgment of the apex court in the case of Collector of Central Excise, Pune Vs Dai Ichi Karkaria Ltd. - 2002-TIOL-79-SC-CX-LB. Accordingly, appeal is allowed.

(See 2016-TIOL-1507-CESTAT-MAD)