2024-VIL-815-CESTAT-AHM-ST
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SERVICE TAX CESTAT Cases

Service Tax - Rules 6(3) and 14 of CENVAT Credit Rules, 2004 - Appellant is engaged in provision of stock broker services and other banking and financial services - In lieu of services provided to investors, Appellant charged brokerage/commission from investors and discharged Service Tax on same - National Stock Exchange (NSE) provided various services to investors and collected charges from investors through Appellant and recovered Service Tax on aforesaid charges from Appellant - Appellant availed Cenvat Credit on service tax paid to NSE, since services provided by NSE were Input Services for business of Appellant - Department issued show cause notice to Appellant proposing demand of wrongly availed credit - Commissioner confirmed demand of cenvat credit - Whether Appellant is entitled for CENVAT Credit on input service which is attributed to output service - HELD - Demand of CENVAT Credit was raised under Rule 14 of the CCR, 2004 - On plain reading of Rule 14 of the Rules, it is clear that CENVAT Credit can be recovered under Rule 14 of the Rules only in case where such CENVAT Credit was availed wrongly - Appellant is engaged in providing output service, i.e stock brokerage service and other financial service - Appellant’s output service is taxable service which is provided on payment of Service Tax - Assessee is allowed to avail CENVAT Credit on all input and input services - If any part of service is attributed to exempted output service, recovery mechanism is provided under Rule 6(3) of the Rules - Admittedly, provisions of Rule 6(3) of the Rules was neither invoked in show cause notice nor invoked for recovery of CENVAT Credit, therefore, availment of credit is in is in order - Demand of CENVAT Credit is not tenable - Demand is also not sustainable on ground of time bar - Impugned order is set aside and appeal is allowed
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