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2017 (1) TMI 1134 - AT - Service TaxCENVAT credit - input and capital goods - capital goods and services received prior to 10/09/2004 - credit in respect of input services provided on Roaming to subscribers of foreign telecom network, exempted due to export - Held that - in view of the transitional provisions provided in Rule 11 of Cenvat Credit Rules, 2004, Cenvat credit on input services received prior to 10/09/2004 were admissible to the appellant. Roaming services - Held that - in view of the said N/N. 36/2007-ST dated 15/06/2007, where Central Government has considered services provided on Roaming to subscribers of foreign telecom network during their visit to India as leviable to Service tax, the contention of the Original Authority that the said services were exempted and that is why 80% of the Service tax credit availed was inadmissible to the appellant is not sustainable. Credit on above two issues allowed - appeal partly allowed - decided partly in favor of appellant.
Issues:
1. Admissibility of Cenvat credit on input services and capital goods. 2. Eligibility of Cenvat credit on capital goods received prior to 10/09/2004. 3. Utilization of Cenvat credit on input services and capital goods. 4. Applicability of Notification No. 36/2007-ST dated 15/06/2007 on Roaming Services. Analysis: Issue 1: Admissibility of Cenvat credit on input services and capital goods The appellant, a telecom service provider, availed Cenvat credit on input services and capital goods. The Show Cause Notices alleged inadmissible Cenvat credit amounting to specific sums. The Original Authority confirmed certain demands related to capital goods, input services, and Roaming Services. The appellant challenged this before the Tribunal. Issue 2: Eligibility of Cenvat credit on capital goods received prior to 10/09/2004 The appellant clarified that Cenvat credit on capital goods received before 10/09/2004 was wrongly denied by the Original Authority. They argued that Rule 11 of Cenvat Credit Rules, 2004 allowed transitional provisions for utilizing such credits post-10/09/2004. The Tribunal considered this contention and modified the Order-in-Original to uphold the admissibility of Cenvat credit on such capital goods. Issue 3: Utilization of Cenvat credit on input services and capital goods Regarding the denial of Cenvat credit on input services received before 10/09/2004, the appellant argued that Rule 11 of Cenvat Credit Rules, 2004 permitted the utilization of such credits post-10/09/2004. The Tribunal agreed with this argument and modified the Order-in-Original to allow the admissibility of Cenvat credit on these input services. Issue 4: Applicability of Notification No. 36/2007-ST dated 15/06/2007 on Roaming Services The Original Authority had confirmed demands related to Roaming Services provided to foreign telecom network subscribers during their visit to India, treating the service as exempted. The appellant argued that Notification No. 36/2007-ST dated 15/06/2007 clarified the levy of Service tax on such Roaming Services. The Tribunal found the Original Authority's contention unsustainable and modified the Order-in-Original to hold the appellant liable only for specific amounts related to Show Cause Notices dated 21/04/2006 and 18/10/2006. In conclusion, the Tribunal partially allowed the appeal, modifying the Order-in-Original to uphold certain demands while setting aside the remaining portions, based on the admissibility of Cenvat credit and the applicability of relevant notifications.
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