M/s. Bharti Airtel Ltd. Versus Commissioner of GST, Central Excise, Chennai And Commissioner of GST, Central Excise, Chennai Versus M/s. Vodafone Essar Cellular Ltd. And Vice-Versa
Service Tax
2018 (3) TMI 708 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 7-3-2018
Appeal No. ST/244 and 301/2010, Appeal No. ST/Misc. /40824/2017 and ST/610/2010, Appeal No. ST/634/2010 – Final Order Nos. 40585-40588 / 2018
Service Tax
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
Shri Raghavan Ramabhadran, Advocate for the Appellant
Ms. P. Hemavathi, Commissioner (AR) for the Respondent
ORDER
Per Bench
The issue arising for consideration in all these appeals being same, they were heard together and are disposed by this common order.
2. The appellants are engaged in providing mobile phone services and are registered with the Service Tax Department under Telecommunication Services. During the course of audit, it was noticed that t
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8,579
8,748,579
Sub-total
169,470,215
94,722,210
74,748,005
INPUT SERVICES
Other input services construction, rent a cab, catering, ASS etc.
146/08
21.10.08
10/04to 12/07
1,026,616
0.00
1,026,616
Other input services construction, renta cab, tour operators
218/09
8.9.09
1/08 to 9/08
673,313
0.00
673,313
Pertaining to towers and shelters
218/09
8.9.09
1/08 to 9/08
2,225,538
0.00
2,225,538
Sub total
3,925,467
3,925,467
Telecom services provided to SEZ Units
Demand denying exemption under 4/04 ST dt. 31.3.04
146/08
21.10.08
4/07 to 9/07
806,158
0.00
806,158
218/09
8.9.09
10/04 to 12/07
2,488,524
0.00
2,488,524
Sub Total
3,294,682
0.00
3,294,682
Grand Total
176,690,364
94,722,210
3,294,682
4. On behalf of the appellants, ld. Counsel Shri Raghavan Ramabhadran reiterated the grounds of appeals. He fairly conceded that the issue whether the appellant is
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edit is admissible and there was no suppression of facts with intent to evade payment of duty. He submitted that the issue in these appeals stand decided by the Larger Bench in the case of Tower Vision India Pvt. Ltd. reported in 2006 (42) STR 249 (Tri. LB). Similar view was taken by the Hon'ble High Court of Bombay in Bharti Airtel reported in 2014 (35) STR 865 (Bom.). The Tribunal in the case of Vodafone Essar South Ltd. and ors. Vide Final Order No. 40194 to 40207/2018 dated 22.1.2018 had applied the very same decision to confirm the demand for normal period but set aside the demand for the extended period and the penalties were also set aside.
3.2 With regard to the demand in respect of input services, he submitted that the appellant had availed credit on various input services such as construction, rent-a-cab service etc. which were used for providing the output service. The period involved is prior to 1.4.2011 and therefore the said credit is eligible as these services have been
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ngly availed credit of duty paid on inputs and capital goods. The fact would not have come to light but for the intervention of the department and therefore the show cause notice issued invoking the extended period is correct and proper.
4.1 In regard to the credit availed on input services, she submitted that the authorities below has rightly disallowed the credit holding that there is no nexus between the input services and the output service provided by the appellants.
4.2 In regard to the issue of telecom service provided to SEZ units by the appellant, she submitted that the appellant is not eligible for the exemption under Notification No. 4/2004 for the reason that the services have been used by the mobile phone users outside the SEZ also.
5. Heard both sides.
6. The first issue for consideration is whether the credit availed on inputs/capital goods as well as towers and shelters is eligible or not. The said issue stands covered by the decision of the Larger Bench and Hon'ble
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l as the penalties for the normal period. Following the same, we are of the considered opinion that the demand on this count for the extended period requires to be set aside which we hereby do. Thus the demand for the normal period will sustain, however, the penalties for the normal period are set aside.
6.1 With regard to disallowance of credit on input services, the issue stands covered by the decision in the case of Vodafone Essar South Ltd. (supra). The Tribunal in the said decision analysed the eligibility of credit on the very same services. The various services were used for providing output services. Further, the period is prior to 1.4.2011 when the definition of input services had a wide ambit as it included the words activities relating to business . Following the above decision in Vodafone Essar South Ltd., we hold that credit is admissible.
6.2 With regard to the denial of exemption under Notification No.4/2004 dated 31.3.2004 alleging that the telecom services are not co
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only to the normal period with no penalties. The demand for the extended period is set aside. In respect of the input services, the credit is held to be eligible and allowed. In respect of denial of exemption under Notification No.4/2004- the demand on this count is set aside. The appeals are partly allowed in the above terms.
Appeal Nos. ST/610/2010 and ST/634/2010
8. The parties herein are hereafter referred to as assessee and department for sake of convenience.
9. Show cause notice was issued proposing to deny credit on inputs, capital goods as well as towers and shelters used for setting up towers used for providing telecommunication services. The credit availed on duty paid pertaining to towers / shelters were also proposed to be disallowed. After due process of law, the original authority disallowed the credit and confirmed the demand in respect of credit availed on inputs / capital goods and towers / shelters. The demand in respect of input services also was confirmed. Howeve
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,699
8,571,6999
10. The issue for consideration in these appeals are identical to the issue in Appeal Nos. ST/244 and 301/2010. Therefore, adopting the same discussions we hold that the credit availed under the category of inputs / capital goods of the duty paid on MS angles, channels etc. as well as towers and shelters are not eligible. The demand being entirely within the normal period, however, for the very same discussions made above and following the decisions in Vodafone Essar South Ltd. Final Order No. 40194 to 40207/2018 dated 22.1.2018, the penalties are set aside.
11. With regard to the demand raised on input services, the facts reveal that the various input services on which assessee has availed credit are erection and installation services, construction etc. These were used for erecting the towers and shelters and PFBS for the period April 2008 to March 2009. The period involved being prior to 1.4.2011, we hold that the services would fall within definition of in
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