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Commissioner of Service Tax Versus M/s. Aircel Cellular Limited

2015 (4) TMI 253 - MADRAS HIGH COURT

Cenvat credit - service tax paid on Access Deficit Charges - input service - Whether the Tribunal has fallen into error by holding that Access Deficit Charge is an Input Service as per the definition in Rule 2(l) of the Cenvat Credit Rules, 2004 - Held that:- Finding of fact by the Tribunal that the facility provided by BSNL to the assessee, who, in turn, provide such services to their subscribers, is nothing but a telecom service is justified. The Department has not produced any material to con .....

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view contrary to the said provision. - no reason to interfere with the order of the Tribunal - Decided against Revenue. - C.M.A. No.545 of 2015 - Dated:- 26-3-2015 - R.sudhakar And T.Raja JJ. For the Appellant : Mr.V.Sundareswaran For the Respondent : Mr.Raghavan Ramabadran Judgment (DELIVERED BY R.SUDHAKAR, J.) This Civil Miscellaneous Appeal is filed by the Revenue as against the order of the Customs, Excise and Service Tax Appellate Tribunal, allowing the appeal filed by the assessee granting .....

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credits so availed is the service tax paid on Access Deficit Charges (ADC) to BSNL. The said ADC is charged by BSNL on the basis of number of calls made by the assessee's subscribers to BSNL at remote locations. The service tax was charged by BSNL for the ADC charges and the assessee paid service tax thereon. The Department collected the same without demur accepting the same as for telecom services. The Department denied the input credit taken by the assessee on the ground that what is provi .....

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y BSNL where the networking facility was not feasible for the respondent. Consequently, the Adjudicating Authority denied the service tax credit on the payment towards ADC holding as follows: "From the foregoing, it would emerge that ADC charges are levied by BSNL to access mostly on rural/remote areas where there is no connectivity by the service provider. Hence it can be inferred that it is only a FACILITY extended, facilitating the service provider to connect the end user by the BSNL whe .....

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assessee pursued the matter before the Tribunal. 4. The Tribunal took the view that the service provided by the BSNL to the assessee is a telecom service as defined under Section 65(109a) of Finance Act, 1994 and held as follows: "We have considered the arguments on both sides. We are not in agreement with the argument that BSNL is providing only a facility and not any service to the appellant. After classifying the facility provided by BSNL as 'Telecom services" and collecting the .....

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to take Cenvat credit on such services. Therefore, we allow this appeal of the appellant in respect of the first issue." 5. Being aggrieved by the order of the Tribunal, the Revenue has filed the present appeal before this Court. 6. Heard learned Standing Counsel appearing for the Revenue and the learned counsel appearing for the assessee and perused the materials placed before this Court. 7. The interpretation in this case revolves around Rule 2(l) of the Cenvat Credit Rules, 2004 which r .....

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