Case Law Details
We find that as per the appellant, major amount of demand working out to Rs.12.07 crores pertains to capital goods credit utilised. We note that the Commissioner wrongly found that the restriction contained in Rule 6(3) of CCR as regards the use of cenvat credit above 20% of the tax paid applied to credit of capital goods also. In the circumstances, we set aside the impugned order and remand the entire case to the Commissioner for a fresh decision on all issues after hearing the assessee. The appeal is allowed by way of remand. Stay petition is also disposed of.
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, BANGALORE
BENCH DIVISION BENCH
COURT NO.I
Application No. ST/St/79/2008
Appeal No. ST/132/2008
Arising out of Order-in-Original No.01/2008-ST(COMMR.) Dated: 4.1.2008
Passed by CCE&C, Thiruvananthapuram
Date of Decision: 28.3.2011
M/s BSNL
Vs
CCE, THIRUVANANTHAPURAM
FINAL ORDER NO.265/2011
STAY ORDER NO.315/2011
Per: P Karthikeyan:
This application is filed by M/s. BSNL for waiver of pre- deposit of an amount of Rs.12,13,90,286/- demanded from them being cenvat credit utilized by them during the period April, 2005 to September, 2006 violating Cenvat Credit Rules, 2004(CCR) to pay service tax. The application also covers various penalties imposed on the appellant including an amount of Rs.12,13,90,286/- under Section 78 of the Finance Act, 1994(the Act) as well as interest applicable on the service tax demanded.
2. After hearing the stay petition for sometime, we find that the appeal itself can be disposed at this stage without further hearing.
3. The demand is confirmed on the ground that the assessee has utilized credit in excess of 20% of the tax paid every month. Moving the application for waiver, the ld. Counsel for the appellant submits that the above restriction applied only in respect of credit relating to inputs and input services. He submits that out of a demand of over Rs.12.13 crores, service tax was paid utilizing capital goods credit to the extent of over Rs.12 crores. The Commissioner had erroneously held that the restriction imposed under Rule 6(3) of the Cenvat Credit Rules, 2004(CCR) applied to utilization of capital goods credit as well. He submits that the matter needs to be remanded to the Commissioner for fresh adjudication in view of the error in his finding. It is also his submission that an amount of Rs.6.5 lakhs was erroneously confirmed against the appellant. This amount was found due on charges for detailed billing, cancellation of SIM cards and for providing fancy numbers. He submits that these are not exigible to service tax as not being output service of BSNL. Yet another submission is that the demand is barred by limitation.
4. Ld. Jt.CDR appearing for the Revenue submits that the entire records do not reflect the submissions now made by the ld. Counsel for the appellant to the effect that an amount of over Rs.12 crores was discharged using capital goods credit. He also submits that returns filed by the assessee did not reflect the collection of charges towards detailed billing, cancellation of SIM cards and for providing fancy numbers etc. He submits that the demand is hence not barred by limitation. The demand is also sustainable on merits.
5. After hearing both sides and perusal of the records, we find that as per the appellant, major amount of demand working out to Rs.12.07 crores pertains to capital goods credit utilised. We note that the Commissioner wrongly found that the restriction contained in Rule 6(3) of CCR as regards the use of cenvat credit above 20% of the tax paid applied to credit of capital goods also. In the circumstances, we set aside the impugned order and remand the entire case to the Commissioner for a fresh decision on all issues after hearing the assessee. The appeal is allowed by way of remand. Stay petition is also disposed of.
(Pronounced and dictated in open court)
