M/s. Vodafone Essar Cellular Ltd. Versus Commissioner of GST & CE, Chennai South Commissionerate
Service Tax
2018 (7) TMI 89 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 1-3-2018
ST/301/2011 – 40972/2018
Service Tax
Ms. Sulekha Beevi C.S. Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
Shri Raghavan Ramabhadran, Advocate for the appellant
Shri K. Veerabhadra Reddy, JC (AR) for the Respondent
ORDER
Per Bench
Brief facts are that during the verification of documents at the time of internal audit/ it was noticed that the appellants had short paid service tax for the period from 01.04.2007 to 31.03.2008 on the national roaming charges received by theme. As per the roaming agreement, for the services rendered to the mobile telecom operators, appellants raise invoices on the other operators who have received the service and pay the service tax. In the instant case, appellants have provided such service to other mobile telecom operators a
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ld the same. Hence this appeal.
2. On behalf of the appellant, the I-de Counsel, Shri Raghavan Ramabhadran appeared and argued the matter, The oral and written submissions made by the Ld. Counsel are summarized as under:-
a) The appellant during the course of rendering their output service receives services from other mobile operators. In cases where the appellant provides national roaming services to other telecom operators the appellant recovers the appropriate charges along with service tax from such operators. Similarly, other telecom operators also provide national roaming services to the appellant for which the appellant pays the charges as well as service tax to the said operators. The appellant avails Cenvat credit of service tax paid on the national roaming services received by them and utilizes such credit to discharge their service tax liability on their output service. Any balance amount is discharged via challan.
b) During the period in question due to an accounting err
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e credit eligible to them would have been availed and utilized towards output service tax liability. Therefore, the entire exercise only results in a situation where the appellant has to make book entries availing the credit and reversing the very same credit for payment of tax. Moreover, when it is an admitted fact that appellant is eligible for credit, both in the OIO as well as in the SCN for discharge of their output liability, there is no revenue loss to the Govt. as it is a wholly revenue neutral situation.
e) The decision of the Hon'ble Tribunal in Commissioner of Central Excise, Rajkot Vs. Reliance Industries Ltd. 2008 (224) ELT 117 (Tri.-Ahmd.) is applicable to the facts of the present case. The issue in the above decision was in respect of eligibility to exemption from duty in respect of inputs captively consumed in the process of manufacture, and whether the said exemption would still be available in respect of the goods used for manufacture of final products which are
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r companies whose services are utilized by the subscriber for roaming facilities. The appellant have not clarified as to why the roaming facility provided to the subscribers would become an input service to them. Therefore, the claim of the appellants that they would be entitled to avail credit and the whole situation is a revenue neutral one is without basis.
4. Heard both sides.
5.1 The details of short payment of service tax for the impugned period is as under:-
Month
Service Tax Due (including Edu. Cess & SHE Cess)
Services Tax paid (including Edu. Cess & SHE Cess)
Difference (including Edu. Cess & SHE Cess)
August 2007
8,58,004
6,36,184
2,21,820
September 2007
39,57,461
16,53,922
23,03,530
October 2007
4,94,564
3,77,443
1,17,121
November 2007
10,42,883
6,75,410
3,67,473
December 2007
34,22,435
15,97,094
18,25,341
January 2008
4,17,847
2,98,477
1,19,370
Total
49,54,664
As explained by the Ld. Counsel for the appellant, during the per
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as been raised only for the very short period from August 2007 to January 2008. On being pointed out the defect in such accounting pattern, the appellant has rectified the same and has started discharging service tax without debiting the amount in such manner.
5.2 On perusal of records and after hearing the submissions made, we find that the arguments of the Ld. Counsel are not without substance. There is nothing brought out from the records that the appellant has falsified any records or availed wrongful credit by any act of fraud. There is nothing brought forth by the department to show that appellants are not eligible for credit of service tax paid on services received by them from other mobile phone operators. When they are eligible for credit, the entire situation is revenue neutral one. It is clear that it was an error in the accounting pattern. Though the Commissioner (Appeals) has made a vague effort to conclude that appellants have not established that the roaming services re
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