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M/s. Vodafone Essar Spacetel Ltd. Versus Commissioner of Central Excise, Customs & Service Tax, BBSR-I

2016 (1) TMI 24 - CESTAT KOLKATA

Cenvat Credit - Capital goods installed in the state of Jammu & Kashmir - services availed in the state of Jammu & Kashmir - imporper duty paying document in respect to managerial services availed - Held that:- all the branch offices of the appellant remain separate service providers even if a centralized registration for discharging service tax liability is obtained by the appellant. Accordingly it is held that when branch office (service provider) in Jammu & Kashmir was not required to dischar .....

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ents - managerial services received - Held that:- The words “invoice”, “bill” and “challan” have not been defined in the Service Tax Rules, 1994 but the details contained in such documents have been prescribed in Rule 4A(1) of these rules. Further provisos under Rule 4A(1) any document, whether or not serially numbered with respect to banking services, GTA Services, and Aircraft Operator Services; has been prescribed. From a collective reading of these provisions we are of the opinion that if de .....

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partment and brought on record, that Cenvat Credit of capital goods and services installed/availed in the state of Jammu & Kashmir has been depicted. Appellant never approached the department at any stage that any ambiguity or confusion exists in taking of credit with respect to capital goods/services installed availed in the state of Jammu & Kashmir. - extended period is applicable and penalty, equivalent to the inadmissible credit, imposed upon the appellant is justified. - Decided partly .....

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mmissioner of Central Excise, Customs & Service Tax, BBSR-I as Adjudicating authority. Under this Order-in-Original dated 05.05.2014 Adjudicating authority has disallowed a credit of ₹ 42,92,90,582/- under Section 73(2) of the Finance Act, 1994, read with Rule 14 of the CENVAT Credit Rules, 2004 and confirmed the same along with interest. An equivalent amount of penalty has also been imposed upon the appellant by Adjudicating authority under Section 78 of the Finance Act, read with Rul .....

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,24,984/- pertain to credit taken on the input services availed in the state of Jammu & Kashmir which is proposed to be denied under Rule 6(1) of the CCR. That a credit of ₹ 16,00,139/- is proposed to be denied, with respect to the credit taken on the basis of documents issued by the Banks, under Rule 9 of the CCR. That remaining credit of ₹ 56,66,711/- is with respect to Service Tax paid on managerial services availed on the basis of duty paying documents which according to Reve .....

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pellant goes to the state of J & K and avails roaming services. That Bhubaneswar circle of the Appellant collects roaming charges from such subscriber and discharges service tax on the same. Therefore, the capital goods installed in the state of Jammu & Kashmir have not been used by the Appellant for exclusively providing exempted services, hence, Rule 6(4) is not violated. (iii) That since the input services were used for providing taxable services as well as exempted services provided .....

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procedural lapses like taking of Cenvat Credit on the invoices prior to taking centralized registration on bank guarantee commission of states other than Orissa, cannot be made the basis for denying Cenvat Credit if otherwise admissible. 2.2 Learned Advocate relied upon CBEC Circular No.22/2/97 dt.03.09.1997 & Delhi Commissionerate Circular dt.26.11.2007 to argue that capital goods installed and services availed in Jammu & Kashmir are also used for taxable roaming services provided by t .....

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Credit on documents which contain all the relevant details learned Advocate relied upon the following case laws:- (a) CCE, Indore v. Gwaliar Chemical Industries Ltd. [2011(274) ELT 97 (Tri-Del.)] (b) CCE, Indore v. Grasim Industries Ltd. [2011(24) STR 691 (Tri.Del.)] (c) Essar Oil Ltd. v. CCE, Rajkot [2011 (303) ELT 255 (Tri-Ahmd.)] (d) JSW Steel Ltd. v. CCE, Salem [2012 (277) ELT 189 (Tri-Chennai)] (e) Pharmalab Process Equipments Pvt.Ltd. [2009 (242) ELT 467(Tri-Ahmd.)] (f) CCE & Cus, Dama .....

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d roaming charges collected from the customers are same everywhere in India. That no such Service Tax paid on roaming charges in the state of Jammu & Kashmir has been separately indicated either in the ST-3 returns filed by the appellant or in the invoices charged to the customers. That centralized registration for seven branch offices/premises, from where services are provided, are only for making accounting and service tax payment easy and does not make all the seven premises as one servic .....

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e 1(2), Rule 2(e), 6(1) and 6(4) of the CCR to argue that Cenvat Credit with respect to capital goods and inputs services was not admissible and has been correctly denied to the appellant by the Adjudicating authority. Regarding invocation of extended period it was his case that nowhere in the returns filed with the department by the appellant it was specified that credit of capital goods and inputs services utilised in Jammu & Kashmir has been taken. 3.1 Regarding taking of Cenvat Credit on .....

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applicable as per Section 64(1) of the Finance Act, 1994? (ii) Whether Cenvat Credit is admissible with respect to the services availed in the state of Jammu & Kashmir? (iii) Whether appellant is eligible to Cenvat Credit of ₹ 72,66,850/- availed by the appellant on documents which according to Revenue are not proper documents as per Rule 9 of the CCR? (iv) Whether extended period of five years can be invoked against the appellant for demanding duty and imposing penalty? 5. So far iss .....

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taken. On the other hand Revenue is of the opinion that no taxable service was provided by the appellant in the state of Jammu & Kashmir and roaming charges, recovered by the appellant will be considered to be services provided at Bhubaneswar as per the CBEC Circulars relied upon by the appellant. It is also the case of the Revenue that centralized registration obtained by the appellant is only a procedure to ease accounting and payment of service tax when service provider in the state of J .....

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er (branch office) in Jammu & Kashmir state starts providing services from Bhubaneswar. Further branch office in Jammu & Kashmir was not required to be included by the appellant in the centralized registration from where no taxable service is provided by virtue of Section 64(1) of the Finance Act, 1994. We are not convinced by the argument of the appellant that the capital goods/towers installed in Jammu & Kashmir are also used for providing taxable roaming services, because such fac .....

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iew of the above all the branch offices of the appellant remain separate service providers even if a centralized registration for discharging service tax liability is obtained by the appellant. Accordingly it is held that when branch office (service provider) in Jammu & Kashmir was not required to discharge service tax then all the capital goods installed in the state of Jammu & Kashmir have to be considered ineligible for taking credit. The observations made by Adjudicating authority in .....

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se rules relating to availment and utilization credit of service tax shall apply to the state of Jammu and Kashmir 6.1 As per the above proviso to Rule 6(2) of CCR the Cenvat Credit Rules do not apply to taking of Cenvat Credit of Service Tax. Therefore, Cenvat Credit taken with respect to services availed in the state of Jammu & Kashmir, has been correctly denied to the appellant. 7. So far as Cenvat Credit of ₹ 72,66,850/-, mentioned at above para 4(iii) is concerned, appellant has a .....

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er than fourteen days from the date of [completion] of such taxable service or receipt of any payment towards the value of such taxable service, whichever is earlier,] shall issue an invoice, a bill or as the case may be, a challan signed by such person or a person authorized by him in respect of [such] taxable service provided or to be provided and such invoice, bill or, as the case may be, challan shall be serially numbered and shall contain the following, namely:- (i) the name, address and th .....

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mbered with respect to banking services, GTA Services, and Aircraft Operator Services; has been prescribed. From a collective reading of these provisions we are of the opinion that if details prescribed in Rule 4A(1) of the Service Tax Rules, 1994 are available in a document then the same can be considered as an invoice, bill or challan and will be a proper document for availing Cenvat credit under CCR. Our view is fortified by the case law of CESTAT, Ahmedabad CCE & Cus, Daman vs. Jalaram P .....

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t Cenvat Credit of ₹ 72,66,850/- (₹ 16,00,139/- + ₹ 56,66,711/-) has been correctly availed by the appellant and appeal to that extent is required to be allowed. 8. Regarding issue at para 4(iv) above, regarding invocation of extended period and imposition of penalty, Adjudicating authority has given following findings:- 4.14 The noticee applied and obtained local Service Tax registration during June, 2007 and centralized registration during July, 2009. Till detection of the ca .....

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a corporate entity and is supposed to be well aware of the provisions of Service Tax statute. Despite this fact, it continuously availed the above impugned credit in violation of the provisions of Rule, 1(2), 3, 6 & 9 of the CCR, 04 which indicates its willful intention for unjust financial benefits. These facts would have gone unnoticed had the departmental officers unearthed the same. Therefore, I find that the above conduct of the notice contains ingredients of suppression of facts and w .....

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ead with Section 78 of the Act. 8.1 On the other hand appellant has argued that extended period of 5 years, under proviso to Section 73(1) of the Finance Act, 1994, will be applicable only if there is willful act or mis-statement or deliberate withholding of information as per the case laws of Padmini Products Limited v. CCE [1989 (43) ELT 195(SC)], Anand Nishikawa Co.Ltd. vs. CCE [2005(188)ELT 149(SC)] decided by Apex Court. It is appellants case that they have correctly taken Cenvat Credit as .....

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teel Ltd. v. The state of Orissa [1969 (2) SCC 627(SC)] Appellant also pleaded that as per the provisions contained in Section 80 of the Finance Act, 1994 issue involved is of interpretation of statutory provisions and there was a bona fide belief on the part of appellant, therefore, penalty is required to be waived. 8.2 As per the provisions contained in Rule 9(6) of the Cenvat Credit Rules, 2004 the burden of proof regarding admissibility of Cenvat Credit lies on the provider of output service .....

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mu & Kashmir in the centralized Registration when no taxable services were provided in the state of Jammu & Kashmir. No service tax credit could be taken by virtue of Section 64(1) of the Finance Act, 1994. We agree with the Adjudicating authority on the reasoning that an assessee of the stature of the present appellant, having the best legal advise at their command, can not be considered to be ignorant of law. No where in the statutory returns/intimations, submitted to the department an .....

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