2026-VIL-1176-CESTAT-DEL-ST
  1. Home
  2. 2026-VIL-1176-CESTAT-DEL-ST

SERVICE TAX CESTAT Cases

Service Tax – Discharge of service tax liability by utilizing CENVAT credit on capital goods instead of making cash payment - Department denied the CENVAT credit utilization and sought recovery of the service tax amount, invoking the extended period of limitation, contending that the appellant, being the recipient of services, could not avail CENVAT credit for discharging service tax under Reverse Charge Mechanism as per Rule 3(4) of the CENVAT Credit Rules, 2004 read with the explanation added vide Notification No. 28/2012 effective from 1st July 2012 - Whether the appellant can discharge service tax liability under RCM in respect of services received from outside India during the period prior to July 2012 by utilizing CENVAT credit – HELD - Under Rule 2(r) of the CCR, 2004 read with Rule 2(1)(d) of the Service Tax Rules, 1994, the Indian recipient of taxable services provided by a service provider located outside India becomes the "provider of taxable service" and consequently becomes eligible to utilize CENVAT credit for payment of service tax on such "output services" as defined in Rule 2(p). The explanation to Rule 3(4) of the CCR, 2004, which creates a substantive prohibition on utilization of CENVAT credit for payment of service tax where the person liable to pay tax is the service recipient, being substantive in nature, cannot be applied retrospectively to the period prior to 1st July 2012 when it came into force, as substantive provisions creating liabilities cannot have retrospective application - Further, Rule 5 of the Taxation of Services Rules, 2006, restricts only the availment of CENVAT credit and not its utilization. Prior to 1st July 2012 there was no restriction on discharging reverse charge liability by utilizing CENVAT credit. Since the appellant paid the entire service tax liability by utilizing CENVAT credit availed for the period prior to July 2012, such utilization is justified. Consequently, the department cannot invoke the extended period of limitation as the show cause notice itself stands barred by limitation - The order under challenge is set aside and the appeal is allowed
Download File

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Tax Vista

Your Weekly Tax Recap

By Kasi Viswanathan V

Weekly Summary

VIL Video

GSTAT Filing Near: Closing Resolutions...
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Security-Code
New Code?

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Security-Code
New Code?

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?