Customs, Excise and Services Tax Appellate Tribunal (CESTAT): Ashok Jindal (Judicial Member) allowed an appeal which was filed against the impugned orders wherein their refund claim lying unutilized in their cenvat credit account was denied to the appellant on the ground that the service on which they are taken the cenvat credit is not input service in terms of Rule 2(l) of the Cenvat Credit Rules, 2004.
Appellant was a provider of output services, providing these services required certain services to be availed from outside on which (being an EOU) the appellant was required to pay service tax under reverse charge mechanism. They paid service tax under reverse charge mechanism and took the cenvat credit of the same in their cenvat credit account. Periodically the appellant filed the refund claims for the cenvat credit lying unutilized in their cenvat credit account. The cenvat credit was sanctioned partly but the cenvat credit pertained to ‘rent a cab service’ was denied holding that the vehicles which have taken on rent by the appellant are not registered in the name of service provider, therefore, they were not entitled to take the cenvat credit on the same in terms of Rule 2(l) of the Cenvat Credit Rules, 2004 as these were not capital goods, therefore the refund claim was denied, thus the instant appeal.
The Tribunal observed that the appellant had taken the cenvat credit on rent a cab service where the service provider had charged the service tax from them and for the remaining invoices, they have paid the service tax under reverse charge mechanism and availed the cenvat credit of the same. The Tribunal further observed that dispute in the matter was of sanction of refund claim of unutilized cenvat credit in their account not the issue of availment of the cenvat credit on the input service; therefore, the Revenue had fell in error and wanted to raise the issue of availment of the cenvat credit while entertaining the refund claim.
The Tribunal allowed the appeal holding that at the time of entertaining the refund claim, the issue of admissibility of the cenvat credit cannot be raised.[C N S Comnet Solution (P) Ltd. v. Commr. Of CE & ST, Service Tax Appeal No. 60001 of 2020, decided on 03-02-2021]
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