Ericsson India Pvt. Ltd. Vs Commissioner of Service Tax (CESTAT Chandigarh)
The appeal was filed by Ericsson India Pvt. Ltd. against an order of the Commissioner (Adjudication), Service Tax, New Delhi, confirming a demand of Rs. 6,73,96,506, along with interest and penalties under Sections 76, 77 and 78 of the Finance Act, 1994.
The appellant was engaged in providing taxable services including Consulting Engineers Service, Maintenance and Repair Services, Erection, Commissioning and Installation, and Information Technology Services. During the relevant period, it paid service tax as the recipient of imported services under Rule 2(1)(d)(iv) of the Service Tax Rules, 1994 and availed CENVAT credit of the tax so paid for discharging its output service tax liability.
During audit, the Department observed that the appellant had paid service tax on imported services and availed CENVAT credit amounting to Rs. 24,10,06,569 for the period 2005-06 to 2007-08. A show cause notice dated 30 September 2009 proposed recovery of Rs. 173,78,43,643 of CENVAT credit for the period 2004-05 to 2008-09 on the ground that, having paid service tax as a recipient under Section 66A on behalf of foreign service providers, the appellant could not be regarded as an output service provider and was therefore ineligible to avail credit under Rules 3(1) and 3(4) of the CENVAT Credit Rules, 2004.
