2018 (3) TMI 708

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....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 they availed credit on inputs and capital goods as well as duty paid on towers and shelters and credit availed on various input services. It was also noticed that they had wrongly availed exemption under Notification No. 4/2004-ST dated 31.3.2004 on Telecom Services provided to SEZ units. Show cause notices were issued proposing to recover wrongly availed credit along with interest and also for imposing penalties. After due process of law, the original au....

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....0,364 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 eligible for credit on inputs and capital goods has been decided against the appellants by the Tribunal in the case of Bharti Airtel Vs. CCE 2012 (4) TMI 362 CESTAT Mumbai. He submitted that, however, part of the demand would fall within the extended period of limitation. The issue whether credit is admissible on duty paid on inputs and capital goods for erection of mobile towers was contentious during the relevant period. The appellant had availed credit on the bonafide belief that credit is admissible on the angles, channels etc. us....

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....es. These services are nothing but activities relating to business of the appellant. Further, the Tribunal in the Final Order cited supra has allowed credit on the very same services. 3.3 With regard to the denial of exemption under Notification No.4/2004, the ld. Counsel submitted that the department has sought to deny the exemption alleging that service had not been consumed within the SEZ. He argued that the mobile subscriptions have been availed within SEZ unit itself. Though the facility of such mobile phones may be used outside the SEZ, the same cannot be a ground to deny the benefit of exemption as per the notification. He adverted to the notification, and submitted that the said notification exempts service tax payable on service....

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....credit on bonafide belief that such credit is admissible. On perusal of records as well as after hearing the submissions, we find that the issue whether credit is admissible on inputs / capital gods as well as towers / shelters was contentious for a long time and had travelled upto the Larger Bench of the Tribunal and thereafter to higher fora. Taking note of these facts, we find invocation of extended period is without grounds. There is nothing to establish that appellant had availed credit suppressing facts with intent to evade duty. All along the issue was being litigated before various authorities. The Tribunal in the Final Order dated 22.1.2018 cited supra, has set aside the demand for the extended period as well as the penalties for t....

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....51 of the Act provides that the Act shall have overriding effect. Taking into consideration all these aspects, we are of the considered opinion that the denial of exemption is unjustified. The demand raised on this count therefore cannot sustain and requires to be set aside which we hereby do. 7. In the result, we uphold the denial of credit on inputs / capital goods and towers/shelters used for setting up of telecommunication towers. The demand so raised will be restricted 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 s....

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....OODS CREDIT Credit of duty paid on towers & shelters 13/09 22.9.09 4/08 to 3/09 6,127,526 6,127,526 INPUT SERVICES Pertaining to towers and shelters 13/09 22.9.09 4/08 to 3/09 2,444,173 2,444,173 Grand Total       8,571,699 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 ....