Order date – 23.09.2022

 Facts –

• The Respondent, Hazira Port Pvt. Limited, was issued a show cause notice dated 14.10.2010 proposing a demand of Cenvat credit of service tax paid under Section 66A for the services of Maintenance or Repairs service, Consulting Engineer Service, Management Consultant Service, Erection & Commissioning service and Information Technology services received from a foreign service provider on reverse charge mechanism. Whereas Rule 3 of Cenvat Credit Rules, 2004, Cenvat credit is allowable only in respect of service tax liable under Section 66 of Finance Act, 1994.
• The Adjudicating Authority dropped the demand on the ground that Section 66A has been added in the list of eligible credit in Rule 3 with effect from 18.04.2006.
• The Revenue filed the present appeal on the ground that the Adjudicating Authority while dropping the demand should have examined that whether the services in question were admissible input service in terms of Rule 2(l) of Cenvat Credit Rules, 2004, therefore the order is not legal and proper.

Issue – 

• Whether the services in question are admissible input service in terms of Rule 2(l)?

Order – 

• The authorities observed that admittedly the show cause notice has alleged that Respondent is not entitled for the Cenvat credit in respect of services namely Maintenance or Repairs service, Consulting Engineer Service, Management Consultant Service, Erection & Commissioning service and Information Technology services on the ground that service tax paid under reverse charge mechanism under Section 66A of the Finance Act, 1994 whereas Rule 3 prescribes the Cenvat credit in respect of service tax leviable under Section 66.
• This issue was correctly decided by the Adjudicating Authority inasmuch as Section 66A was added retrospectively in Rule 3 for allowing Cenvat credit. As regards the issue that whether the services in question are admissible input service in terms of Rule 2(l), this issue was never raised in the show cause notice. 
• The authorities do not find any error on the part of the Adjudicating Authority for not considering the issue of admissible input service in terms of Rule 2(l).
• Revenue appeal dismissed.