Custom, Excise & Service Tax Tribunal
Bsnl vs Cce, Ghaziabad on 14 July, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. III Service Tax Appeal No. 683 of 2009 (DB) (Arising out of the Order-in-Original No.13/COMM/ST/GZB/08, dated 20.05.09 passed by the CCE, Ghaziabad) For approval and signature of: SHRI S. S. KANG, HONBLE VICE PRESIDENT SHRI MATHEW JOHN, HONBLE TECHNICAL 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 Their Lordships wish to see the fair copy :
of the Order?
4. Whether Order is to be circulated to the Departmental :
Authorities
-----------------------------------------------------------------------------
BSNL Appellant
Versus
CCE, Ghaziabad Respondent
Appearance
Shri Rahul Kaushik,, Advocate - for the appellant.
Shri Amrish Jain, SDR for the respondent.
CORAM : Honble Shri S.S.Kang, Vice-President
Honble Shri Mathew John, Member(Technical)
DATE OF HEARING / DEICISION : 14/07/2011.
Order No. ________________ Dated : _____________
Per S.S.Kang:
Heard both sides. Appellant filed this appeal against the impugned order whereby the Adjudicating Authority confirmed the service tax demand along with interest and penalties. Order part is re-produced below :-
1. Service Tax amounting to Rs.2,91,74,734/- (Rs. Two crores ninety one lakhs seventy four thousand seven hundred thirty four only) paid through CENVAT Credit is ordered to be recovered from M/s BSNL, O/o GMTC, Raj Nagar Telephone Exchange Building, Ghaziabad in terms of Rule 14 of Cenvat Credit Rules, 2004 read with proviso to section 73 of Chapter V of the Finance Act, 1994.
2. Cenvat credit amounting to Rs.20,16,142/- (Rs. Twenty lakhs sixteen thousand one hundred forty two only) is ordered to be recovered from M/s BSNL, O/o GMTC, Raj Nagar Telephone Exchange Building, Ghaziabad in terms of Rule 14 of Cenvat Credit Rules, 2004 read with proviso to Section 73 of Chapter V of Finance Act, 1994.
3. Service Tax amounting to Rs.93,85,214/- (Rs. Ninety five lakhs seventy two thousand nine hundred eighteen only) is ordered to be recovered from M/s BSNL, O/o GMTC, Raj Nagar Telephone Exchange Building, Ghaziabad under section 73 of Chapter V of Finance Act, 1994.
4. Interest at the appropriate rate as applicable from time to time is ordered to be charged and recovered from M/s BSNL, O/o GMTC, Raj Nagar Telephone Exchange Building, Ghaziabad under the provisions of Section 75 of Chapter V of the Finance Act, 1994.
5. An equal amount of penalty, i.e., Rs.4,07,63,794/- (Rs. Four crores seven lakhs sixty three thousand seven hundred ninety four only) is being imposed upon M/s BSNL, O/o GMTC, Raj Nagar Telephone Exchange Building, Ghaziabad for the above contravention of CCR and ST Rules under the provisions of Rule 15(4) of Cenvat Credit Rules, 2004 read with section 78 of Chapter V of the Finance Act, 1994, as discussed supra.
6. Penalty of Rs.200 for every day from the date of actual payment of the outstanding amount of service tax/mis-utilisation of credit (upto 17.04.06) and w.e.f. 18.04.06, penalty of Rs.200 per day during which such non-payment/mis-utilisation continues or at the rate of 2% of total tax liability per month, whichever is higher, till date of actual payment /recovery of the amount involved, subject to maximum of Rs.4,07,63,794/- (Rs. Four crores seven lakhs sixty three thousand seven hundred ninety four only) is being imposed upon M/s BSNL, O/o GMTC, Raj Nagar Telephone Exchange Building, Ghaziabad under Section 76 of Chapter V of the Finance Act, 1994.
2. The contention of the appellant is that against the demand of Rs.2,91,74,734/- the Appellants provided taxable as well as exempted services, therefore, Revenue wants to restrict the utilization of credits to the extent of 20% in respect of the service tax payable on the taxable services in view of the provisions of Rule 6(3)(C) of Cenvat Credit Rules, 2004 and also restricted the utilization of credit which is taken in respect of capital goods. The contention is that this restriction is only applicable in respect of input credit or creit on input services and not in respect of credit on the capital goods. The appellants relied upon the decision of the Tribunal in the case of BSNL vs. CCE, Trivandrum reported in 2009(13) STR553(Tri.Bang.) and in the case of Idea Cellular Ltd. vs. CCE, Rohtak reported in 2009(16)STR712(Tri.-Del.) whereby the Tribunal held that Credit utilisation restriction of 20% not applicable to the capital goods credit.
3. In respect of the other demand of Rs.20,16,142/-, the contention is that the credit was denied on the ground that applicant failed to produce original documents. Before the adjudicating authority appellant produced photocopies of the documents and now the applicant has produced the original also in view of this the applicant pleads remand in this regard.
4. In respect of demand of Rs.95,72,918/-, the contention is that this demand is confirmed after taking into figures mentioned in the audit report. The contention is that in the monthly return, the appellant has disclosed that value of exempted services of Rs.1,09,05,257/- whereas in the audit report, the figures of non-taxable services is mentioned as Rs.8,91,15,374/-. The Revenues demand on the ground that the appellant had suppressed the value of taxable service. The contention is that in the figures given to the audit report, the amount of non-taxable service as mentioned Rs.8,91,15,374/-. Therefore, the demand on the ground that the appellant has suppressed the value of taxable service is not sustainable.
5. The Revenue relied upon the provisions of Rule 6(3)(C) and submit that in case the provider of out put service is providing taxable as well as non-taxable services in such case assessee can utilize credit to the extent of amount not exceeding 20%. The contention is that the restriction is in respect of utilization of credit which includes the credit on the capital goods also. It is also submitted that the appellant had not provided any data in the monthly return, the quantum of credit in respect of capital goods input ervice separately. Therefore, at this stage to quantify the demand on this ground is not possible.
6. In respect of other demand, the contention is not as per the appellant documents which were produced during the audit shows the figures non-taxable service which were much more than the monthly return and in respect of denial of credit, the contention is that the appellant failed to produce the duty paying document, therefore, credit is rightly denied.
7. We find that the issue in respect of 20% of utilization of credit in case of assessee who is provided taxable as well as exempted services in now settled by Tribunal in the case of Idea Cellular and in the case of BSNL (supra) and Tribunal held that the credit utilization restriction of 20% is not applicable in respect of credit availed on capital goods.
8. In view of this, we find merit in the contention of the appellant on this issue. Therefore, we remand the matter back to adjudicating authority to look into this issue afresh.
9. In respect of other demand, we find that the appellant now produced original duty paying documents and therefore, the matter requires reconsideration.
10. Similarly, in respect of the demand on the ground that appellant suppressed the value of taxable service, we have gone through the audit report, there breakup of Revenue submitted at the time of audit, we find mention is in respect of non-taxable services and not of taxable service hence, this issue also requires reconsideration by the adjudicating authority. In view of this, impugned order is set aside, the matter is remanded to the adjudicating authority to decide the issues afresh after affording an opportunity for hearing the appellant. Appeal is disposed by way of remand.
(Order dictated in the open court.) (S.S.Kang) Vice President) (Mathew John) Member(Technical) RK-I