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December 2015

If service receiver has paid service tax to service provider, CENVAT credit can be availed by service receiver even prior to registration obtained by service provider.

By Puloma Dalal
Jayesh Gogri
Mandar Telang, Chartered Accountants
Reading Time 2 mins
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43. 2015 (40) STR 288 (Tri. –Bang) Adecco Flexione Workforce Solutions Ltd. vs. CCE, Bangalore – LTU.

If service receiver has paid service tax to service provider, CENVAT credit can be availed by service receiver even prior to registration obtained by service provider.

Facts

CENVAT credit is denied on the ground that the service provider had taken registration subsequent to availment of CENVAT credit by service receiver.Therefore, the CENVAT credit would not be available to service receiver. Accordingly, CENVAT credit of trivial amount was denied in absence of registration number on invoices.

Held

If the assessee has paid service tax to service provider, CENVAT credit is available to service receiver without finding whether service tax paid by him to service provider stands deposited in the Government treasury. Verification of the fact of payment of service tax by service provider is impossible and impractical at service receiver’s end. Even if the revenue is of the view that service tax collected by service provider is not deposited by him, remedy is available with the department to take appropriate action against service provider and not service receiver. In the present case, the revenue did not even verify the fact of non-payment by service provider. Therefore, it was held that the appellant had rightly availed CENVAT credit.

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