2012 (10) TMI 160 - AT - Service Tax

Availment of Cenvat Credit- Amount involved in question is Rs. 6,58,95,919/. - taxable and exempted services - Held that - Advice Transfer Debit can be considered as prescribed document under Rule 9 of Cenvat Credit Rules, 2004 and hence the credit can be allowed as it gives all the required details like name and address and registration number of the supplier as also the duty paid on each equipment. As decided in case of Idea Cellular Ltd. v. CCE 2009 2009 (2) TMI 91 - CESTAT NEW DELHI where credit is taken on input and input services used in providing the output services- credit in respect of capital goods if they have not exceeded the ceiling of 20% of credit taken on inputs and input services and therefore the demand is not maintainable. Service tax on Leased Circuit Services Demand is not maintainable as per sec 65(l09a) service has to be chargeable at the time when the service was provided - Demand for Pre-deposit waived in favour of assessee.

Summary

Issues:
1. Denial of Cenvat credit amounting to Rs. 6,58,95,919 for the period April 2009 to March 2009.

Analysis:
The appellant's demand arises under three categories. Firstly, concerning credit taken based on Advice Transfer Debit (ATD) issued by central procuring offices, involving a credit of Rs. 5,72,79,745. The appellant argued that the ATD contains all necessary details and requested condonation of the irregularity. Secondly, the issue of utilizing Cenvat credit in excess and 20% tax to be paid on each invoice, amounting to Rs. 47,38,186. The appellant contended that the restriction applies only to credit taken on input and input services used in providing output services, not capital goods. Thirdly, service tax on the value of Leased Circuit Services amounting to Rs. 38,77,988, where the appellant argued that service tax should be paid only if the service was chargeable at the time of provision.

Regarding the first issue, the Revenue argued that ATD is not a specified document under Cenvat Credit Rules and insisted on strict compliance. For the second issue, the Revenue contended that the appellant failed to provide a clear statement distinguishing credit on capital goods from input and input services. Concerning the third issue, the Revenue argued that the definition of telecommunication service before 1.6.2007 covered leased circuit services, making them taxable. Additionally, the Revenue disputed the appellant's claim for interest on delayed payments due to lack of evidence supporting correct tax payments based on realized bills.

The Tribunal found a prima facie case for waiver of pre-deposit, citing precedents in similar cases favoring the appellants. The Tribunal noted that the demand on various issues was not maintainable based on existing rules and interpretations. Specifically, the Tribunal highlighted the need for a detailed examination of the appellant's accounts before concluding on the interest payable issue. Consequently, the Tribunal waived the pre-deposit requirement for admission of the appeal and imposed a stay on the collection of dues during the appeal's pendency.