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September 2015

2015 (39) STR 331 (Tri.-Ahmd) Memories Photography Studio vs. Commr. of C. Ex. & S. T., Vadodara

By Puloma Dalal
Jayesh Gogri
Mandar Telang Chartered Accountants
Reading Time 1 mins
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If service recipient was unaware of nonpayment of service tax by service provider before taking CENVAT credit, the same shall be allowed.

Facts:
The limited question for consideration in the present case was whether CENVAT credit can be denied to the recipient of input services if service tax is not paid by service provider. The department contended that the appellants should have taken precaution to verify the fact of discharge of service tax liability by service provider. Since service provider had not paid service tax liability, CENVAT credit was not admissible to service recipient.

Held:
Revenue could not provide any evidence on record to prove that the appellants were aware of non-payment of service tax by service provider before taking CENVAT credit. Service recipient would only see CENVATA BLE document. It was not the case of non-existence of service provider. Therefore, CENVAT credit was correctly availed.

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