2016 (11) TMI 1005 - AT - Service Tax

CENVAT credit - telephone services - input service - leased circuit services - Held that - This is the second round of litigation. In the earlier round of litigation this Tribunal directed the Adjudicating Authority to decide the issue of limitation but the same was not considered. As the facts and records are available before us, therefore, we are having the privilege to decide the issue of limitation. As admitted that the appellant had filed Cenvat credit returns regularly and the same was received by Revenue and in the knowledge of the Department, therefore, the show cause issued for invoking extended period of limitation is not sustainable - We also find that on the issue of valuation on account of sim-card was also being dispute and the same was decided by the Apex Court in Idea Mobile Communications Ltd. 2011 (8) TMI 3 - SUPREME COURT OF INDIA , therefore, extended period of limitation is not invokable during the impugned period. Demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Cenvat credit availed by the appellant for rendering output services.
2. Demand of service tax on the value of sim-cards sold.
3. Adjudication of issues by the Tribunal and remand to Commissioner.
4. Compliance with Tribunal's directions by the Adjudicating Authority.
5. Consideration of limitation issue.
6. Decision on the issue of limitation.
7. Dispute regarding valuation of sim-cards.
8. Invoking extended period of limitation.

Analysis:

1. The appellant availed Cenvat credit for rendering output services under the category of telephone services for leased circuit services. The Revenue contended that the appellant was not entitled to this credit as they had already taken credit on leased circuit services for providing telephone services.

2. A demand of service tax was raised on the value of sim-cards sold by the appellant during the relevant period. The issue of including sim-card value in taxable service was disputed, citing a precedent set by the Apex Court in a similar case.

3. The Tribunal found that the Commissioner's order lacked discussions on raised issues and remanded the matter back to the Commissioner for fresh adjudication. The Tribunal emphasized the need for a thorough examination of all issues and evidence.

4. Despite the Tribunal's directions, the Adjudicating Authority did not consider all points raised in the remand proceeding, leading to the appellant's appeal against the order.

5. The appellant argued that the issue of limitation was crucial, as the Adjudicating Authority failed to comply with the Tribunal's direction to consider this issue in the earlier round of litigation.

6. The Tribunal, in the second round of litigation, decided the issue of limitation based on the appellant's regular filing of Cenvat credit returns, which were known to the Revenue. The show cause notice invoking extended limitation was deemed unsustainable.

7. The dispute over the valuation of sim-cards was resolved by referring to a precedent set by the Apex Court, leading to the conclusion that the extended period of limitation was not applicable during the relevant period.

8. Consequently, the Tribunal set aside the demand against the appellant, ruling that the show cause notice could not be issued by invoking the extended period of limitation. The appeal was allowed, and the impugned order was set aside with any consequential relief.

This detailed analysis of the judgment covers the issues involved, the arguments presented by both parties, and the Tribunal's decision on each aspect of the case.