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October 2015

2015 (39) STR 684 (Tri.-Bang.) India Vision Satellite Communications Ltd. vs. CCE, C & ST, Cochin

By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
Reading Time 1 mins
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Service recipient need not examine the correctness of service tax paid by service provider for claiming CENVAT Credit.

Facts:
The Appellants availed services of installation and commissioning in respect of an equipment and as per the Agreement, equipment rental charges were payable as well. Service tax paid on rent was availed as CENVAT credit. However, the service provider was registered with service tax authorities only for installation and commissioning services. Without digging into the facts of the case, the department and Commissioner (Appeals) denied CENVAT credit on the grounds that equipment rent was not eligible input service and if it is considered to be installation and commissioning services, the amount cannot be paid every month for a one time activity.

Held:
It is a settled law that if service tax is paid by service provider and service receiver is eligible for CENVAT credit, responsibility to examine correctness of service tax paid by service provider is not cast upon the service receiver. Accordingly, relying on various decisions, the Tribunal allowed CENVAT Credit.

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