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2016 (1) TMI 24 - CESTAT KOLKATA

2016 (1) TMI 24 - CESTAT KOLKATA - 2016 (43) S.T.R. 124 (Tri. - 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 bran .....

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denied to the appellant. - Credit dened. - Regarding duty paying documents - 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. Fro .....

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of law. No where in the statutory returns/intimations, submitted to the department 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 inadmiss .....

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Order-in-Original No.COMMR/B-I/ST-01/2014 dated 05.05.2014 passed by the Commissioner 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 b .....

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ch is proposed to be denied in view of Rule 6(4) of CCR. That ₹ 11,52,24,984/- 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 ser .....

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well as exempted services when a subscriber of Bhubaneswar circle of the Appellant 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 .....

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en by the appellant and accordingly Rule 9 of CCR is not violated. (v) That 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 J .....

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n used for providing taxable service during roaming. 2.3 For taking Cenvat 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 .....

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llant for providing roaming services in the state of Jammu & Kashmir and 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 serv .....

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64(1) of the Finance act, 1994, Rule 4(2) of Service Tax Rule, 1994 and Rule 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 J .....

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ed in the state of Jammu & Kashmir where service tax provisions are not 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 a .....

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t Credit Rules 2004(CCR) are not applicable and Cenvat Credit was correctly 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 ac .....

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g centralized registration of Bhubaneswar does not mean that service provider (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 & Kas .....

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g contrary to that aspect has been brought on record by the appellant. In view 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 ineli .....

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) They extent to the whole of India: Provided that nothing contained in these 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 ₹ .....

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, bill or challan. 4A.(1) Every person providing taxable service [, not later 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 numb .....

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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 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 fortif .....

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sed in the output services provided by an assessee. Accordingly we hold that 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, 20 .....

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noticee for providing taxable service at Bhubaneswar in 2007. The notice is 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 abo .....

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h interest, the notice is liable for penalty under Rule 15 of the CCR, 04 read 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 Co .....

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ii) CCE v. Gamma Consultancy (P) Ltd. [2006(4)STR 591(T)] (iii) Hindustan Steel 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 rega .....

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a mis-statement on the part of the appellant to include the premises of Jammu & 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 .....

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