CENVAT Credit Admissible Once Service Tax is Paid and Supported by Valid Invoice, Irrespective of Whether Paid by Provider or Recipient: CESTAT [Read Order]
CESTAT ruled that CENVAT credit is admissible once service tax is paid and supported by valid invoices, regardless of whether paid by the provider or recipient.
![CENVAT Credit Admissible Once Service Tax is Paid and Supported by Valid Invoice, Irrespective of Whether Paid by Provider or Recipient: CESTAT [Read Order]](https://images.taxscan.in/h-upload/2025/09/15/2087571-cenvat-credit-cestat-taxscan.webp "CENVAT Credit Admissible Once Service Tax is Paid and Supported by Valid Invoice, Irrespective of Whether Paid by Provider or Recipient: CESTAT [Read Order]")
The Kolkata Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) ruled that CENVAT credit is admissible once service tax has been paid and supported by valid invoices, irrespective of whether the tax was discharged by the service provider or the recipient under the reverse charge mechanism.
Neelamber Catterers Pvt. Ltd., the appellant, received manpower supply services from Sonu Services. The service provider had already charged service tax in its invoices and deposited the amount with the government. The department demanded service tax again from the appellant under the reverse charge mechanism and also denied CENVAT credit of Rs. 1,44,431/- on the ground that the tax should have been paid by the recipient.
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The appellant argued that once service tax was collected and deposited by Sonu Services, demanding the same tax again would result in double taxation. They further argued that valid invoices were available showing payment of service tax, and CENVAT credit could not be denied in such circumstances.
The revenue counsel supported the findings of the lower authority and maintained that the tax should have been paid under the reverse charge mechanism by the appellant, not by the service provider.
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The single-member bench comprising K. Anpazhakan (Technical Member) agreed with the appellant’s position. The tribunal observed that service tax had already been collected and deposited by the provider, and demanding it again from the recipient would amount to double taxation.
The tribunal pointed out that once service tax is paid and supported by proper invoices, credit is admissible regardless of who discharges the tax liability. The tribunal explained that denial of CENVAT credit in such a situation is not legally sustainable. The demand and reversal were set aside.
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