Custom, Excise & Service Tax Tribunal
M/S. Nokia Siemens Network Pvt. Ltd vs Commr. Of Central Excise, Kolkata-Iii on 7 September, 2015
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EAST REGIONAL BENCH : KOLKATA
Excise Appeal No. E/387/2012
(Arising out of the Order-in-Original No. 39/Commr./CE/KOL-III/2011-12 dated-22 March, 2012 passed by the Commissioner of Central Excise, Kolkata-III)
For approval and signature of:
DR. D.M. MISRA, HONBLE JUDICIAL MEMBER
SHRI H.K. THAKUR, HONBLE TECHNICAL MEMBER
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1. Whether Press Reporters may be allowed to see :
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not ?
3. Whether Their Lordships wish to see the fair copy :
of the Order?
4. Whether Order is to be circulated to the Departmental :
Authorities ?
M/s. Nokia Siemens Network Pvt. Ltd.
APPELLANT(S)
VERSUS
Commr. of Central Excise, Kolkata-III
RESPONDENT(S)
APPEARANCE
Sri Siddharth Jain, C.A.
FOR APPELLANT(S)
Sri K. Choudhuri, Supdt. (A.R.)
FOR THE RESPONDENT(S)
CORAM:FO/A/75470/2015
DR. D.M. MISRA, HONBLE JUDICIAL MEMBER
SHRI H.K. THAKUR, HONBLE TECHNICAL MEMBER
DATE OF HEARING & DECISION : 07/09/2015
ORDER NO : FO/A/75470/2015
Per DR. D.M. MISRA
This is an appeal filed against Order-in-Original No. 39/Commr./CE/KOL-III/2011-12 dated-22 March, 2012 passed by the Commr. of Central Excise, Kolkata Commissionerate-III.
2. Briefly stated the facts of the case are that the appellant are engaged in the manufacture of various telecommunication equipments falling under Chapter 85 of CETA, 1985. A show cause notice was issued to them for recovery of CENVAT Credit amounting to Rs.3,67,37,879/- alleging violation various provision of CENVAT Credit Rules,2004 during the period April, 2006 to June, 2009. In nutshell, it is alleged that the appellant had taken credit on input services used in or in relation to trading of goods, hence not admissible to CENVAT Credit. On adjudication, the demand was confirmed with interest and equal amount of penalty was imposed. Aggrieved by the said order, the appellant are in appeal.
3. Ld. Chartered Accountant Sri Siddharth Jain for the appellant submits that the Ld. Commissioner has not considered their submissions that during the year 2008-09 to 2009-10, the appellant had discharged Service Tax of Rs.3,33,570,228/-, under reverse charge mechanism in relation to services of down loading of software in their factory, supplied by the overseas supplier. Such software is customized and configured in the factory using the Master Tech Bed for the different sites and net work elements of the customers. Further, the Software is used to configure hardware manufactured by the appellant and also to ascertain whether the same are functioning properly, thereafter the software is supplied along with the hardware to their customers. In other words, the entire software down loaded by the appellant has been used in or in relation to the manufacture of the equipment and the said software was not used for trading of the soft ware as alleged. Thus, the credit is admissible on such downloaded software as an input service. Similar argument has been addressed in relation to other inputs/input services received and utilized in or in relation to the manufacture of dutiable products and not used in the exempted products/services. It is their contention that the Ld. Commissioner has not considered any of their submissions while adjudicating the case. However, he has fairly accepted that they have furnished sample copies of documents/evidences and the entire set of evidences were not placed before the Commissioner during the course of adjudication, which they are now in possession and in a position to satisfy the Commissioner on the eligibility of CENVAT Credit.
4. Ld. A.R. for the Revenue reiterated the findings of the Ld. Commissioner. He has submitted that the evidences now the appellant placed before the Tribunal were not before the Ld. Commissioner, hence the order was passed without considering the evidences. He has no objection in remanding the case.
5. Heard both sides and perused the records. We find that on the major portion of the demand the Ld. Commissioner has proceeded on the premise that the appellant are engaged in trading of the goods and they have wrongly availed CENVAT Credit on input services used in carrying out the trading activities. The claim of the appellant on the other hand is that the softwares down loaded from the overseas supplier have been used in or in relation to the manufacture of the dutiable goods. The Ld. Chartered Accountant brought to the notice of the Bench their categorical reply to the show cause notice( annexed at page 87 of the appeal paper book) rebutting the said allegation, which reads as follows:
During the year 2008-09 and 2009-10, NSNPL made payments of service tax amounting to INR 3,33,570,228/- under reverse charge for electronic download of software within its factory. Such software is customized and configured in the factory using the Master Test Bed for the different sites and network elements of the customer. Thereafter the software is used to configure the manufactured hardware to ensure that the hardware is functioning properly. Thereafter such software is delivered alongwith the hardware or electronically supplied and also invoiced separately and service tax is charged on such software supplies. Sample copy of the invoices issued by NSN to the customer for of the software is attached and marked as Annexure F. In view of the above, it is evident that the software downloaded by NSNPL is used directly in the taxable activity i.e. for configuration of manufactured equipment and supply of software on which service tax is charged. Accordingly, NSNPL was rightly entitled to avail 100% Cenvat credit of service tax paid on such download of software.
6. It is their contention that the Ld. Commissioner has not considered the aforesaid submissions and confirmed the demands for want of sufficient evidence. On the other hand, the contention of the Revenue is that all the documents/evidences were not produced before the Ld. Commissioner during the course of adjudication to which the Ld. C.A. for the appellant fairly concedes. Therefore, in the interest of justice, it is prudent to remit the case to the Ld. Commissioner to decide the issue afresh taking into consideration all evidences and the issues raised by the appellant in their reply to the show cause notice. credit. Consequently, the impugned order is set aside and the matter is remitted to the Ld. Commissioner for deciding the issue afresh on merit. At this stage, the Ld. C.A. submits that since the appellant had closed down their operation in India, therefore, a time frame may be fixed for disposal of the case. The ld. A.R. for the Revenue has no objection. We find force in the said plea, accordingly, we direct the Ld. Commissioner as far as practicable, to completer the adjudication within four months from the date of communication of this order. Needless to mention that reasonable opportunity of hearing be given to the appellant. All issues are kept open. Appeal is allowed by way of remand.
(Operative part of the order already pronounced in the Court)
Sd/- Sd/- 09/9/2015
(H.K. THAKUR) (D.M. MISRA)
Technical Member Judicial Member
k.b/-
Excise Appeal No. E/387/2012
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