Custom, Excise & Service Tax Tribunal
M/S. Bharat Sanchar Nigam Ltd vs Cce & St, Salem on 18 February, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
ST/41896/2013
(Arising out of Order-in-Appeal No. 103/2013 dated 18.06.2013 passed by the Commissioner of Central Excise & ST (Appeals) , Salem).
M/s. Bharat Sanchar Nigam Ltd. : Appellant
Vs.
CCE & ST, Salem : Respondent
Appearance Ms. D. Naveena, Adv., for the Appellant Ms. Indira Sisupal, AC (AR), for the Respondent CORAM Honble Shri P. K. Choudhary, Judicial Member Date of Hearing : 18/02/2016 Date of Pronouncement: 18.04.2016 FINAL ORDER No. 40620 / 2016 This is an appeal filed by M/s. Bharat Sanchar Nigam Limited, Salem, Telecom District Salem, against the order of the Commissioner (Appeals) dated 17.06.2013.
2. Brief facts of the case are that the appellant are providers of taxable service under the category of Telecommunication Service and availed CENVAT credit of Rs.5,79,972/- on the basis of improper documents. A Show cause notice was issued to the appellant proposing to demand ineligible CENVAT credit of Rs.5,79,972/- and also to impose penalty under Rule 15(3) of the CENVAT Credit Rules, 2004, read with Section 78 of the Finance Act, 1994. The Adjudicating Authority vide Order in Original No.41/2012-ST (ADC) dated 30.11.2012, ordered for recovery of CENVAT Credit of Rs.5,79,972/- and imposed equal amount of penalty under Section 78. Being aggrieved the appellant preferred an appeal before the Learned Commissioner (Appeals). The Commissioner (Appeals) vide Order in Appeal No.103/2013-ST dated 17.06.2013 rejected the appeal and upheld the order in original. Aggrieved by the order of the Learned Commissioner (Appeals) the appellant assessee is in appeal before this Tribunal.
3. The learned counsel Ms.D.Naveena, Advocate appearing on behalf of the appellant company submits that the period of dispute is from April, 2008 to September, 2009 and the fact of receipt of service, payment of service tax along with service charges and the input invoices as per Rule 9 of the CER, 2004, have not been disputed by the department during the audit of the accounts of the appellant. The appellant had submitted sufficient documentary evidence such as GAR-7 challan for payment of service tax by the service providers and their respective registration certificate during the proceedings. The credit availed as input credit service in respect of Sri.Iqbal, Tour Operator who had not specified service tax in the bill has been reversed with interest. She further submits that the appellant being a Government of India undertaking, has no reason to suppress the facts and their accounts are not camouflaged. There was no intention to evade payment of service tax. She brought to my attention that Rule 9(3) has been deleted with effect from 01.03.2007. Copy of Notification No.10/2007-C.E (N.T.) dated 01.03.2007 is produced in support of her submission. She relied on the Supreme Court decision in CCE, Jalandhar vs. KAY KAY Industries, reported in 2013 (295) ELT 177 (SC).
4. The Ld. AR, Ms. Indira Sisupal, AC, appearing on behalf of the Revenue reiterated the findings of both the authorities below and submits that the appellants have contravened the provisions of Rule 2(l), 3(1) and 9 of Cenvat Credit Rules, 2004 in as much as they have availed Cenvat credit of Rs. 5,79,972/- without due verification and diligence. They had willfully availed the above ineligible credit with an intent to evade payment of duty to that extent.
5. After hearing both sides, and on perusal of records, the issue to be decided in the instant case is as to whether the documents which were issued bear the proper service tax registration number and whether after holding the service tax registration, the appropriate tax has not been paid to the Exchequer. The Appellate Commissioner has observed that the appellants have not furnished any documentary proof evidencing payment of service tax by the service providers, which is the crux of the demand; that in spite of being provided with a detailed list of service providers, based on their documents, credit availed appeared improper, the service provider has not taken any steps to prove that the credit availed on the basis of such documents was in order.
6. A precisely opposite stand was taken by the appellant in Ground No. 9 of their Grounds of Appeal filed before this Forum. The said ground is reproduced:
The appellants furnished the copies of Registration Certificates and copies of GAR-7 (pages 44-68 of the paper book) for payment of service tax by the service provider as a proof for availing credit during the appeal before the Commissioner (Appeals), but the appellate authority without considering them had reiterated the Order in Original and rejected the appeal.
In view of the apparently conflicting stand adopted by the appellant and by the Commissioner (Appeals), it is but proper that the matter is remitted back to the Adjudicating Authority as the allegations require factual verification. On remand, the authority shall check the genuineness of the appellants claim and pass appropriate orders on merits and in accordance with law. Needless to mention that the authority shall adhere to the principles of natural justice. The lower authority shall also bear in mind that the appellant, being a Public Sector Undertaking, the aspect of penalty and invocation of larger period should not be viewed very strictly as the appellant too, like the revenue, is one of the arms of the Government.
7. Appeal is allowed by way of remand on the above terms.
(Order Pronounced in the open court on 18.04.2016.) (P.K. CHOUDHARY) Judicial Member BB 4