TMI Blog2023 (5) TMI 1153X X X X Extracts X X X X X X X X Extracts X X X X ..... ar South Limited, Chennai and Show Cause Notice No. 14/2010 dated 29.04.2010 was issued to M/s. Vodafone Essar Cellular Limited, Coimbatore and it appears that the above Show Cause Notices were for the periods from September 2004 to March 2007 and April 2005 to May 2007 respectively. Further, he appears to have accepted the plea of the appellant in their reply to the Show Cause Notice No. 71/2008 that, in view of the clear provisions of Rule 6(5) ibid., they were entitled to avail and utilize the whole of the CENVAT Credit in respect of the specified services unless the same were used exclusively for providing exempted output service; that it is not the case of the Revenue that the appellant had used any of the specified services exclusively for providing exempted output service and that the restriction under Rule 6(3)(c) would not apply to services specified in Rule 6(5) ibid. It is clear from the findings of the Learned Commissioner that he has held that the ceiling of 20% under Rule 6(3)(c) is not applicable to capital goods and 17 input services specified under Rule 6(5). The Bench has also considered the Board Circular No. 137/203/2007-CX-4 dated 01.10.2007 to hold that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvocate for the Appellant Smt. K. Komathi, Additional Commissioner for the Respondent ORDER M/s. Vodafone Mobile Services Ltd. (formerly M/s. Vodafone Essar Cellular Ltd.), who is the appellant herein, has come up in appeal against the Order-in-Original No. CHN-SVTAX-03-COM-66 67-2016-17 dated 28.02.2017 passed by the Commissioner of Service Tax, Service Tax-III Commissionerate, Chennai. 2.1 Brief undisputed facts, as could be gathered from the Show Cause Notice as well as the impugned order, are that the appellant is in the business of providing telephone services (later known as telecommunication services ) which were brought under the Service Tax net with effect from 01.07.1994 vide Notification No. 01/94 dated 28.06.1994. It appears that the appellant has been paying Service Tax regularly, but it appeared to the Revenue that the appellant was not paying Service Tax on the interconnection service falling under the category of telecommunication service, which enables the telephone subscribers of various telegraph authorities to connect with each other. The Revenue also appears to have noticed that the appellant, who was providing the interconnection servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6(3)(c) ibid. would not apply to credit availed on capital goods since the appellant had sufficient credit and consequently, there was no excess utilization, as alleged in the Show Cause Notice. 3.1.2 They further appear to have pleaded that Rule 6(4) ought to have been invoked and not Rule 6(3)(c) since it mandates that no CENVAT Credit is eligible only if the capital goods are used exclusively in the manufacture of exempted goods or in providing exempted services. 3.1.3 They also appear to have contended that the demand was barred by limitation as the extended period of limitation could not have been invoked since the Revenue, other than alleging suppression, has not brought out any documentary evidence on record to justify the same and which is contrary to the documents borne on record. 3.1.4 The appellant claimed to have been filing, as admitted by the Revenue, its returns regularly under the erstwhile telephone services and later, telecommunication services and that their accounts were regularly audited by the Revenue; with the amendment effective 20.10.2005 which required an assessee to provide details of credit taken, separately, on inputs, input services and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epresentative for the respondent. 7.1 The Learned Advocate for the appellant, while reiterating the grounds urged against the impugned order, would submit that the primary assumption of the Revenue is that the entire credit utilized pertained to the credit taken on inputs and input services and hence, restricting to 20% in terms of Rule 6(3)(c) ibid., was wrong and that the Revenue has failed to take note of the fact that the restriction in Rule 6(3)(c) would not apply to the credit availed on capital goods insofar as Show Cause Notice No. 14/2010 was concerned. In this regard, she submitted that Rule 6(4) would apply and not Rule 6(3)(c). 7.2 The Learned Advocate has also submitted that in respect of the earlier Show Cause Notice No. 71/2008 which was issued on similar allegations, proposing to demand similar CENVAT Credit, the lower authority had dropped the proceedings by observing that the utilization of credit in excess of 20% of the capital goods credit and on the services specified in Rule 6 (5) ibid. was in order; but however, the lower authority has deviated without any logic to confirm the demand proposed in Show Cause Notice No. 14/2010 after observing that the Sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cause Notice No. 14/2010, the lower authority has only observed that the appellant did not maintain separate accounts though it was providing both taxable and exempted services prior to 01.06.2007 and hence, they should have utilized credit only to the extent of an amount not exceeding 20% of the amount of Service Tax payable on taxable output service. 11.1.2 At paragraph 5.9, the Learned Commissioner has referred to the earlier paragraphs 5.3 and 5.4, to hold that the ceiling of 20% of utilization of credit was not applicable to capital goods and to 17 input services specified under Rule 6(5) ibid. 11.1.3 In the impugned order, the Adjudicating Authority has clearly admitted that Show Cause Notice No. 71/2008 dated 28.03.2008 was issued to M/s. Vodafone Essar South Limited, Chennai and Show Cause Notice No. 14/2010 dated 29.04.2010 was issued to M/s. Vodafone Essar Cellular Limited, Coimbatore and it appears that the above Show Cause Notices were for the periods from September 2004 to March 2007 and April 2005 to May 2007 respectively. Further, he appears to have accepted the plea of the appellant in their reply to the Show Cause Notice No. 71/2008 that, in view of the clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 input services specified in Rule 6(5), he holds as under: - 5.9 As already discussed in Para 5.3 5.4 I hold that the ceiling of 20% of utilization of credit is not applicable to capital goods and to 17 input services specified under Rule 6(5) of CCR. However unlike in the Show cause notice No. 71/2008 where the demand is made on the credit utilized in excess of 20% relating to capital goods and input services specified under Rule 6(5) of CCR, the demand in this notice is issued for utilization of Cenvat credit in excess of 20% of input and input services. 11.2.3 It is clear from the findings of the Learned Commissioner in the paragraph extracted hereinabove that he has held that the ceiling of 20% under Rule 6(3)(c) is not applicable to capital goods and 17 input services specified under Rule 6(5). 12.1 We find that the above is precisely the ratio laid down by the Learned Principal Bench in the case of M/s. Idea Cellular Ltd. (supra) wherein the contentions of the appellant therein have been accepted by the Bench. The relevant observation of the Learned Principal Bench reads as under: - 4. Second plea of the Appellants is that even if the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of the input services credit not falling under Rule 6(5) and inputs. 13.1 In the impugned order, the Learned Commissioner having held as extracted in the above paragraph, however, denies the above benefit to the appellant by holding that the appellant did not provide any evidence or supporting documents to prove their claim. 13.2 We do not agree with the above conclusion for the reason that the same set of documents, apparently, were relied upon and the Learned Commissioner has also nowhere denied the fact that the eligibility to utilize the whole of CENVAT Credit could not be denied in respect of the specified services unless the same were exclusively used for providing exempted output service and nor is it the case of the Department that the restriction under Rule 6(3)(c) would not apply to the services specified in Rule 6(5). 14.1 Insofar as the arguments of the Learned Advocate with regard to invoking of the extended period of limitation, we find that the Learned Commissioner has confirmed the contention in the Show Cause Notice that the Department had no other way of knowing the facts until their records were audited which, according to us, runs contrary t ..... 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