2008 (9) TMI 78 - AT - Service Tax

Allegation that assessee, BSNL availed credit on certain input services used for rendering both taxable and exempted services - BSNL contend that they should be deemed to have had separate registration for their landline unit and mobile services unit (appellant-unit) on the basis of the fact that the two units had no common billing/accounts held that BSNL should be treated as a person different from the landline unit matter remanded to be decided after considering the documents on record

Summary

Issues:
1. Applicability of Rule 6(3)(c) of the CENVAT Credit Rules, 2004.
2. Separate registration for different units of the appellant.
3. Permission to file certain documents for the appeal.
4. Out-of-turn disposal of the appeal.

Analysis:
1. The appeal involved a demand of Rs. 7,77,54,952/- towards service tax and Rs. 75,14,101/- towards interest under Section 73 and Section 75 of the Finance Act, 1994. The appellant, M/s. BSNL, availed CENVAT credit on input services used for both taxable and exempted output services. The appellant argued for separate registration for their landline and mobile services unit to avoid the excess credit demand under Rule 6(3)(c) of the CENVAT Credit Rules, 2004. The Tribunal found that if the appellant-unit with separate registration is treated as a distinct 'person' from the landline unit, the demand under Rule 6(3)(c) would not apply. Thus, the matter was remanded to the Commissioner of Service Tax for a fresh decision based on the plea of separate registration.

2. The appellant sought permission to produce certain documents, including a crucial letter dated 14-1-2004, to establish separate registration for their mobile telephone unit. The Tribunal allowed the production of the letter as it was deemed crucial for the case, while rejecting the request for other documents. The need for these documents arose from the argument that separate registration would impact the applicability of Rule 6(3)(c) and the subsequent demand on the appellant.

3. The Tribunal allowed the appeal by way of remand, directing the Commissioner of Service Tax to reconsider the dispute in light of the documents, including the letter dated 14-1-2004. The impugned order was set aside, emphasizing the importance of considering the plea of separate registration in determining the tax liability of the appellant.

4. The decision to remand the case for fresh consideration by the Commissioner of Service Tax necessitated the rejection of the request for out-of-turn disposal of the appeal. The Tribunal highlighted the need for a correct decision based on the plea of separate registration, indicating the complexity and significance of this issue in the overall dispute resolution process.