Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise & ... vs M/S. Bharat Sanchar Nigam Ltd on 20 February, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
EAST ZONAL BENCH: KOLKATA
SERVICE TAX APPEAL NO.ST/A/71343/2013
(ARISING OUT OF ORDER-IN-APPEAL NO.40/DIB/CE(A)/GHY/13 DATED 27.08.2013 PASSED BY COMMISSIONER OF CUSTOMS & CENTRAL EXCISE (APPEALS), GUWAHATI)
FOR APPROVAL AND SIGNATURE OF
DR. D.M.MISRA, HONBLE JUDICIAL MEMBER
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 His Lordship wishes to see the fair copy :
of the Order?
4. Whether Order is to be circulated to the Departmental :
Authorities ?
COMMISSIONER OF CENTRAL EXCISE & SERVICE TAX, DIBRUGARH
APPELLANT
VERSUS
M/S. BHARAT SANCHAR NIGAM LTD.
...RESPONDENT
APPEARANCE:
SHRI A.ROY, A.R. (SUPDT.) FOR THE REVENUE;
SHRI A.K.BHATTACHARYA, CONSULTANT FOR THE RESPONDENT.
CORAM:
DR. D.M.MISRA, HONBLE JUDICIAL MEMBER Date of Hearing & Decision:20.02.2015 ORDER NO.FO/A/75104/2015 This is an Appeal filed by the Revenue against the Order-in-Appeal No.40/DIB/CE(A)/GHY/13 dated 27.08.2013 passed by the Commissioner of Central Excise(Appeals).
2. At the outset, ld. AR for the Revenue submits that the Respondent, a public sector undertaking, availed CENVAT Credit on various Transmission tower materials during the relevant period. He submits that the CENVAT Credit on transmission tower materials are not available, the definition of capital goods, as prescribed under Rule 2(a)(A)(i) of the CENVAT Credit Rules, 2004, are not satisfies; also these were not inputs, as defined under Rule 2(k) of the CENVAT Credit Rules, 2004. The Respondent, on being pointed out, reversed the entire amount of Credit of Rs.9,58,644/- and also paid the interest. It is the grievance of the Revenue that the authorities below had imposed penalty meagre penalty of Rs.10,000/- under Rule 15(1) of the CENVAT Credit Rules, 2004, which is inadequate and be enhanced.
3. Ld. Consultant for the Respondent, on the contrary, submits that during the relevant period, principle of law on admissibility of CENVAT Credit on transmission tower materials had been in dispute. The Respondent, a public sector undertaking, had discharged the duty and interest, immediately after being pointed out by the Department. He submits that the ld. Commissioner (Appeals) has recorded reasons, while rejecting the appeal of the Revenue against enhancement of penalty.
4. Heard both sides and perused the records. I find that the Adjudicating Authority has imposed penalty of Rs.10,000/- on the Respondent, under Rule 15(1) of the CENVAT Credit Rules, 2004, for availing CENVAT Credit of Rs.9,58,644/- on transmission tower, which was held to be inadmissible to them. Aggrieved by the said Order, the Revenue filed the Appeal before Ld. Commissioner(Appeals). The ld. Commissioner (Appeals) while rejecting the Appeal of the department recorded reasoning at para 13 of the impugned Order as:-
13. .The appellant has filed the appeal on the ground that whether the impugned order is proper and legal in imposing the reduced amount of penalty of Rs.10,000.00 under rule 15(1) of CCR,2004. It is observed that the adjudicating authority should have imposed the penalty to the amount not exceeding Rs.9,58,644.00 under Rule 15(1) of CCR,2004. But the assesses is a Central Government Department and the staff and the officers of the department do not have any vested interest for evading tax or taking Cenvat Credit wrongly. They also maintained the records of Transmission Tower in their books of account properly. Also the department is wrong in interpreting the rules 'words' not exceeding as 'equal'. That the penalty under the rule cannot be in excess of the amount of duty/tax involved but may be less than that in proportion to the gravity of the case. That therefore, it can be interpreted that the provisions of the rule in question are certainly not as severe as those of section 11AC of Central Excise Act,1944 which deals with serious offences making the evasion punishable by imposing penalty equal to the intended evasion. Accordingly, while deciding this aspect, I consider sympathetically that the lapse happened under the understanding that the tower material and tower are the inputs for the telecom service. Thus I find that the adjudicating authority has rightly imposed the reduced amount of penalty of Rs.10,000.00 under Rule 15(1) of CCR, 2004 , the contention of the appellant is not tenable and the appeal is liable to be rejected.
5. I do not see any valid reason to differ from the above finding of the ld. Commissioner (Appeals). In the result, the Appeal filed by the Revenue being devoid of merit, is dismissed.
(Dictated and pronounced in the open court.) Sd/-02.03.15 (D.M.MISRA) JUDICIAL MEMBER DUTTA/ 3 ST/A/71343/2013 3