Challan is Valid Document for proving Payment of Service Tax: CESTAT [Read Order]

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad ruled that Challan through which service tax was paid is valid document for availing cenvat credit.

The appellant, Srini Link is a service recipient and paid the service tax in respect of services received from service provider whereas, the service tax liability statutorily was on the service provider. The appellant has taken the cenvat credit in respect of such service tax paid by them under reverse charge mechanism on the strength of bank challan whereby, the service tax was deposited.

The case of the department is that firstly, since the appellant was not liable to pay service tax, whatever service tax was paid is not available as cenvat credit. Secondly, the challan through which the service tax was paid is not valid document for availing the cenvat credit in view of Rule 9 of Cenvat Credit Rules, 2004.

A Single Bench consisting of Ramesh Nair, Judicial Member observed that “As regard the contention of the department that the challan through which the appellant have paid the service tax is not a valid document for availing the cenvat credit. This issue is no longer res-integra as in the various judgments, some of which are cited by the appellant. It is clearly held that the challan through which the service tax was paid is a valid document for availing the cenvat credit therefore, for this reason also the cenvat credit cannot be denied.”

“The cenvat credit was denied to the appellant on the ground that the service tax was paid by the appellant as a recipient whereas, it was supposed to be paid by the service provider. In this regard, I find that there is no specific condition in the Cenvat Credit Rules that the cenvat credit can be allowed only when service tax is paid by the service provider.”

“In my considered view the appellant have rightly availed the cenvat credit in respect of service tax paid by them on receipt and use of service” the Tribunal ruled.

To Read the full text of the Order CLICK HERE

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