2018 (11) TMI 1387

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....e period from 2008-09 to 2011-12. Vide order-in-original no. 62/ST/RN/SCL/M II/13-14 dated 18th August 2014, Commissioner of Central Excise, Mumbai-II confirmed demand of Rs. 2,71,97,608 and, while imposing penalties of like amount under section 78 of Finance Act, 1994, also, for the demand pertaining for the period upto 16th May 2008, invoked section 76 of Finance Act, 1994. 2. Narrating the background of the dispute, Learned Chartered Accountant informs that employees are classified in various categories and a scale of eligibility to free service is provided to them as part of the policy of the appellant. The bills raised in the automated system for each such connection is written off by the appellant to the extent of eligibility and ser....

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....al to furnish the segregation of such use held to be a pre-requisite in the impugned order. 3. Furthermore, he relied upon the decision of the Tribunal in Hico Products Ltd, Bombay v. Collector of Central Excise, Bombay [1983 (14) ELT 2483 (CEGAT)] and the decision of the Hon'ble Supreme Court in Union Carbide India Ltd v. State of Andhra Pradesh [267 JT 1995 (3) 218] to seek relief by invoking the doctrine of dominant use. He also contends that, for most of the period covered by the demand, tax liability was to be discharged on actual receipts and, therefore, imposition of tax on a free service rendered to its employees was not legal and that recourse to rule 3(a) of Service Tax (Determination of Value) Rules, 2006 could be had only when ....

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.... service. Since it has been placed on record by Learned Chartered Accountant that the dispute is limited to the billed amount on which tax liability is not discharged to the extent of write-off, and the policy clearly stipulates that billing shall only be to the extent of calls outside the circle and on other networks, our conclusion supra is reinforced. With that, the argument advanced on behalf of the assessee that it is impossible to determine the extent of personal calls would not sustain as also the reliance upon the doctrine of dominant use. 6. It also appears from the records that the bills are raised on, and in the names of, the personnel of the company; had these been billed to the company, the absence of a second person as a reci....