By TIOL News Service

MUMBAI, MAR 23, 2018: THE appellant had availed CENVAT credit of Rs.6,42,150/- on the ‘manpower and security service' procured by them.

In the matter of the said service, tax was to be remitted to the extent of 25% by the provider of the service and 75% by the recipient of the service.

There is no dispute as regards payment of the said service tax amounts.

However, it is the contention of the Revenue that the appellant is eligible to avail CENVAT credit ONLY to the extent that they had remitted the tax.

The Commissioner(A) sided with the decision of the original authority and, therefore, the appellant is before the CESTAT.

The Bench considered the submissions and observed –

++ It is not in dispute that the appellant is in possession of invoice for the services that were rendered to them and that the CENVAT credit was availed for the amount of tax indicated in the invoice. This is entirely in accordance with the provisions of CENVAT Credit Rules, 2004.

++ Splitting of the responsibility for remitting the tax amount to the government has been prescribed for some services for specific reasons of policy. The entitlement to credit of the full tax amount in the invoice is inevitable as the balance amount is also recovered from appellant by the service providers.

Concluding that the assertion of Revenue that appellant was entitled only to that portion of CENVAT credit which had been remitted by them is not based on law, the impugned order was set aside and the appeal was allowed.

(See 2018-TIOL-932-CESTAT-MUM)