ST - Output services written off as bad debts

 

CST vs. Krishna Communications - 2013 (31) STR -285 (Tri.-Ahmd)

Facts:

The respondents providing advertising service were duly registered with the department and discharged service tax liability as and when the payments were received. The amount already billed but subsequently found irrecoverable, were written off by it as bad debts.

The department demanded reversal of proportionate CENVAT credit taken on input services on account of such output service invoices being written off as bad debts which the Commissioner (Appeals) dropped holding that credit on input services was taken correctly and that the said input services were used for providing output services liable for payment of service tax.

Held:

Observing that there cannot be one-to-one co- relation for availing and utilising CENVAT credit of input services with provision of output service, the Hon. Tribunal held that the reasoning of the first