TaxTMI 
TaxTMI 
2018 (8) TMI 1691
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....hether the said service provider had provided service to the appellant or not, more so when the said service provider has been assessed to service tax under Business Support Service for the service rendered by them to the appellant. b) Is the Tribunal not in error in refusing credit to the appellant for service tax paid by them to service provider when payment of service tax by the appellant for the service rendered by service provider is not in dispute and that it is settled, the assessment to tax at the hands of the service provider end cannot be questioned in the hand of service receiver (appellant in this case) 3. The factual background, which is necessary for considering the merits of these appeals, is stated below:- The appellants/assessees are all job workers for M/s.Brakes India Limited, Chennai (hereinafter referred to as BIL ). The assesses are engaged in the manufacture of excisable goods and hold the registration for the said activity. The assesees contended that they are eligible to avail credit for Central Excise Duty paid for Inputs & Capital Goods and also eligible to avail credit for the service tax paid for Input Service received . The credits so availed are u....
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....ving data relating to assesses, who are sub-contractors/job workers and therefore, the service is rendered by the BSNL and Reliance Communication Limited and is received by BIL and the BIL have raised the bill on the assessees claiming reimbursement of the aforesaid MPLS charges with service tax and since the invoice is for reimbursement of expenses incurred, it has been alleged that no service was rendered by BIL and availment of credit by the assessees on the service tax paid by BIL is ineligible credit. The assesses contended that the show cause notices have been issued without proper verification of facts and understanding of the transanction. By referring to paragraph 2.1 of the show cause notices, the assesses contended that the BIL are retrieving data relating to the assesses from the server and are further processing the same for their end use and but for assessess providing the details, the BIL themselves are retrieving the data and therefore, by retrieving data relating to assesses for utilizing the same for further operations, the BIL is rendering the service. Further, the assessess have explained that but for BIL retrieving data, assesses would have retrieved the data a....
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....ices are barred by limitation. 7. The Adjudicating Authority, namely, the Assistant Commissioner of Central Excise, Commissionerate, Division IV, Chennai-2, held that the assessees' case is not acceptable inasmuch as they have not produced any poof to support their claim that the reimbursement was for certain services rendered by BIL other than MPLS service. Further, it was held that even the invoices issued by BIL to the assessees mentioned the description of the service as 'MPLS Cost' and the assesses have not produced any document to support their claim that the service tax was paid at the insistence of Service Tax Authorities and therefore, the credit availed by the assessees on the Service Tax paid on the services received at BIL is not in order and liable to be recovered from the assessees. Further, the Adjudicating Authority held that the BIL cannot be construed as an 'Input Service Distributor' as defined under Rule 2(m) of the CENVAT Credit Rules, 2004, since input service distributor can distribute credit of service tax paid on input service only to its manufacturing units. Thus, it disallowed the Service Tax credit availed by the assesses for the rel....
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....vailed by the assesseess as credit is only a reimbursement and it is an attempt of BIL to pass costs incurred by them towards MPLS. 12. Mrs.Aparna Nandakumar, learned Senior panel counsel for the Revenue, produced a lecture on Multi Protocol Label Switching with Quality of Service in High Speed Computer Network to explain as to what is Multi Protocol Label Switching (MPLS) and it has been stated therein that it is a method that directs data from one system node to the next based on short path lables rather than long network addresses in high-performance telecommunication association. Referring to a chart showing the working methodology, it is submitted that it is a facility created and the beneficiary is BIL and no input service is rendered by the BIL to the assessees for them to claim Input Tax Credit. 13. To test the correctness of the said submission, we give the following illustration, which is broadly the nature of transactions done by the assessees with BIL. 14. The BSNL / Reliance Communications Private Limited have provided the MPLS facility to BIL and assuming the amount to be paid is Rs. 100/- towards the cost and Rs. 10/- towards the Service Tax, when the invoice is r....