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TMI Blog2018 (3) TMI 708X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Vodafone Essar South Ltd. (supra). The Tribunal in the said decision analysed the eligibility of credit on the very same services. The various services were used for providing output services. Further, the period is prior to 1.4.2011 when the definition of input services had a wide ambit as it included the words activities relating to business - credit not allowed. Denial of exemption under Notification No.4/2004 dated 31.3.2004 - Held that: - Merely because the facility of the mobile phone is used outside the SEZ unit also, the exemption in terms of Notification No. 4/2004 cannot be denied - benefit of notification allowed. Appeal allowed in part. - Appeal No. ST/244 and 301/2010, Appeal No. ST/Misc./40824/2017 and ST/610/2010, Appeal No. ST/634/2010 - Final Order Nos. 40585-40588 / 2018 - Dated:- 7-3-2018 - Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri Raghavan Ramabhadran, Advocate for the Appellant Ms. P. Hemavathi, Commissioner (AR) for the Respondent ORDER Per Bench The issue arising for consideration in all these appeals being same, they were heard together and are disposed by this common ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1/08 to 9/08 2,225,538 0.00 2,225,538 Sub total 3,925,467 3,925,467 Telecom services provided to SEZ Units Demand denying exemption under 4/04 ST dt. 31.3.04 146/08 21.10.08 4/07 to 9/07 806,158 0.00 806,158 218/09 8.9.09 10/04 to 12/07 2,488,524 0.00 2,488,524 Sub Total 3,294,682 0.00 3,294,682 Grand Total 176,690,364 94,722,210 3,294,682 4. On behalf of the appellants, ld. Counsel Shri Raghavan Ramabhadran reiterated the grounds of appeals. He fairly conceded that the issue whether the appellant is eligib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot been consumed within the SEZ. He argued that the mobile subscriptions have been availed within SEZ unit itself. Though the facility of such mobile phones may be used outside the SEZ, the same cannot be a ground to deny the benefit of exemption as per the notification. He adverted to the notification, and submitted that the said notification exempts service tax payable on services provided to SEZ units and therefore the demand raised on this count cannot sustain. 4. The ld. Commissioner (AR) Ms. Hemavathi reiterated the findings in the impugned order. She argued that the appellants have wrongly availed credit of duty paid on inputs and capital goods. The fact would not have come to light but for the intervention of the department and therefore the show cause notice issued invoking the extended period is correct and proper. 4.1 In regard to the credit availed on input services, she submitted that the authorities below has rightly disallowed the credit holding that there is no nexus between the input services and the output service provided by the appellants. 4.2 In regard to the issue of telecom service provided to SEZ units by the appellant, she submitted that the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces are not consumed wholly within the SEZ Unit, we find that the mobile services are provided by the appellant to SEZ units. The department does not have a case that the subscribers are outside SEZ units. Merely because the facility of the mobile phone is used outside the SEZ unit also, the exemption in terms of Notification No. 4/2004 cannot be denied. Further, the period involved is after 10.2.2006 when the SEZ Act 2005 came into existence. Section 26 of the Act grants various exemptions from taxes and duties to SEZ. Section 51 of the Act provides that the Act shall have overriding effect. Taking into consideration all these aspects, we are of the considered opinion that the denial of exemption is unjustified. The demand raised on this count therefore cannot sustain and requires to be set aside which we hereby do. 7. In the result, we uphold the denial of credit on inputs / capital goods and towers/shelters used for setting up of telecommunication towers. The demand so raised will be restricted only to the normal period with no penalties. The demand for the extended period is set aside. In respect of the input services, the credit is held to be eligible and allowed. In respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 44 and 301/2010. Therefore, adopting the same discussions we hold that the credit availed under the category of inputs / capital goods of the duty paid on MS angles, channels etc. as well as towers and shelters are not eligible. The demand being entirely within the normal period, however, for the very same discussions made above and following the decisions in Vodafone Essar South Ltd. Final Order No. 40194 to 40207/2018 dated 22.1.2018, the penalties are set aside. 11. With regard to the demand raised on input services, the facts reveal that the various input services on which assessee has availed credit are erection and installation services, construction etc. These were used for erecting the towers and shelters and PFBS for the period April 2008 to March 2009. The period involved being prior to 1.4.2011, we hold that the services would fall within definition of input services. The disallowance of credit is unjustified. The impugned order to extend disallowing of credit on input services is set aside. However, while disallowing the credit on input services, the Commissioner has wrongly involved the provisions pertaining to inputs for which reason alone the department has filed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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