2008 (10) TMI 174

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.... for the Respondent [Order per: P.G. Chacko, Member (J)]. - This appeal is against denial of CENVAT credit on capital goods amounting to over Rs. 1.1 crores as also against demand of equivalent amount of service tax for the periods 2005-06 and 2006-07. This appeal also challenges penalties imposed on the appellants. 2. M/s. BSNL (appellants) have a Deputy General Manager (Projects) at Chenna....

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.... 3. The learned counsel for the appellants submits that, technologically, the capital goods should be held to have been used in Salem SSA also. The capital goods installed in any SSA anywhere in India are involved in BSNL's activity of rendering of telephone service to subscribers all over the country and, therefore, the capital goods on which SSA, Salem took CENVAT credit should be held to hav....

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....er SSAs but CENVAT credit thereon was taken in the SSA at Salem. According to the learned SDR, this is clearly impermissible under the CENVAT Credit Rules, 2004. 4. After considering the submissions, we find that the capital goods were purchased on behalf of M/s. BSNL (appellants) by their DGM (Projects) at Salem, from manufacturers. These capital goods were installed in some of the SSAs within....

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....e event of the capital goods being removed as such out of the other SSAs (where they were installed) the question will arise as to who will pay duty thereon. The learned counsel has endeavoured to allay these fears. We are of the view that, though this aspect is seen untouched in the show cause notice and the impugned order, it needs to be addressed in the interest of the Revenue. More importantly....