9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (4) TMI 253 - HC - Service TaxCenvat credit - service tax paid on Access Deficit Charges - input service - Whether the Tribunal has fallen into error by holding that Access Deficit Charge is an Input Service as per the definition in Rule 2(l) of the Cenvat Credit Rules, 2004 - Held that - Finding of fact by the Tribunal that the facility provided by BSNL to the assessee, who, in turn, provide such services to their subscribers, is nothing but a telecom service is justified. The Department has not produced any material to contradict this finding of fact. - A plain reading of Rule 2(l) of the Cenvat Credit Rules, 2004 makes it clear that the assessee in this case is the user of the service provided by BSNL and that service is used for providing output service to the customers of the assessee. Therefore, the definition squarely applies to the facts of the present case. Since the assessee has satisfied the requirement of Rule 2(l) of the Cenvat Credit Rules, 2004, the Department was not justified in taking a different view contrary to the said provision. - no reason to interfere with the order of the Tribunal - Decided against Revenue.
Issues:
- Interpretation of Rule 2(l) of the Cenvat Credit Rules, 2004 regarding the eligibility of Cenvat credit on service tax paid on Access Deficit Charges (ADC) to BSNL. Detailed Analysis: 1. Facts of the Case: The appellant, a service provider, availed credit of service tax paid on various input services, including Access Deficit Charges (ADC) to BSNL. The Department denied the input credit, claiming that ADC charges were for a facility, not telecom services, and thus not eligible for credit. 2. Adjudication by the Department: The Adjudicating Authority denied the service tax credit on ADC charges, stating that it was merely a facility provided by BSNL to connect end-users in rural/remote areas where networking was not feasible for the appellant. The Authority held that ADC charges did not qualify as input services under Rule 2(l) of the Cenvat Credit Rules, 2004. 3. Appeal to the Tribunal: The assessee appealed to the Tribunal, arguing that the service provided by BSNL was indeed a telecom service as defined under the Finance Act, 1994. The Tribunal agreed, stating that BSNL's service fell under telecom services and was essential for the appellant's output services, making it an input service eligible for Cenvat credit. 4. High Court's Analysis: The High Court examined Rule 2(l) of the Cenvat Credit Rules, 2004, which defines an "input service" as a service used by a provider of taxable service for providing an output service. The Court found that the service provided by BSNL to the appellant was a telecom service necessary for the appellant's output services, thus meeting the criteria for an input service under the Rule. 5. Decision: The High Court upheld the Tribunal's decision, ruling in favor of the assessee and dismissing the Revenue's appeal. The Court found no justification to interfere with the Tribunal's order, as the appellant had satisfied the requirements of Rule 2(l) for claiming Cenvat credit on the service tax paid on ADC charges to BSNL. 6. Conclusion: The judgment clarified that the service provided by BSNL to the appellant constituted a telecom service essential for the appellant's output services, making it eligible for Cenvat credit under Rule 2(l) of the Cenvat Credit Rules, 2004. The Court's decision favored the assessee, affirming their right to claim the Cenvat credit on the service tax paid on ADC charges to BSNL.
|
