Cenvat credit couldn’t be denied to assessee because service provider did not pay taxes to Government

Rule 3 of the Cenvat Credit Rules, 2004 - CENVAT Credit - General - Stay order - Assessee took credit of service tax on security services - Department denied credit on ground that provider of security services did not discharge Service Tax liability at their end - HELD : Assessee had paid amount (including service tax) raised in invoices issued by security service provider to such service provider for services rendered - Assessee cannot be faulted with for availing credit of Service Tax paid for which he has already made payment to service provider - Non-payment of Service Tax liability by service provider to Government agency, prima facie, cannot be held against assessee - Hence, requirement of pre-deposit was waived [Para 2] [In favour of assessee]

Refer:[2014] 45 taxmann.com 85 (Ahmedabad - CESTAT)
CESTAT, AHMEDABAD BENCH
Prime Houseware Ltd.
v.
Commissioner of Central Excise, Vapi