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December 2013

2013 (32) STR 209 (Tri.-Del) Kansara Modler Ltd. vs. CCEx, Jaipur-II

By Puloma Dalal, Jayesh Gogri, Mandar Telang, Chartered Accountants
Reading Time 1 mins
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Whether the receiver of services is entitled to utilise the CENVAT credit for payment of service tax under the Import Rules? Held, Yes.

Facts:
Appellant received “supply of tangible goods service” from outside India for the provision of its output services in India and utilised CENVAT credit for discharging the service tax payable as the service recipient of the said services. The department issued a show cause notice disallowing the utilisation of such CENVAT credit payment of service tax and confirmed the demand.

Held:
Referring to Rule 2(q) of the CENVAT Credit Rules, 2004 read with Rule 2(1)(d)(iv) of Service Tax Rules,1994 it was held that the Appellant was a person liable to service tax and thus becomes a taxable service provider under Rule 2(r) of the CENVAT Credit Rules, 2004 and consequently becomes output service provider under Rule 2(p) of the said Rules. Thus the order of the Commissioner (Appeals) disallowing the payment under reverse charge mechanism vide CENVAT credit was set aside.

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