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TMI Blog2018 (8) TMI 1691X X X X Extracts X X X X X X X X Extracts X X X X ..... was collected from the assessees by BIL was only the amount on which the CENVAT credit has been claimed by the assessees. Therefore, unless and until the assessment made on BIL was revised, which obviously could have been done, at this juncture, on account of the expiry of the period of limitation, the interpretation given by the Commissioner (Appeals) as well as the Tribunal with regard to the nature of invoice raised on the assesses is unsustainable - If the impugned orders are allowed to stand, then it would in effect mean that the jurisdictional assessment officers of the assesses are sitting in the judgment over the assessment made on BIL, over which, they have no jurisdiction. Appeal allowed - decided in favor of assessee. - C.M.A.Nos.723 to 725, 795 and 806 to 810 of 2018 and CMP.Nos.6636, 6720 to 6724 and 6206 to 6208 of 2018 C.M.A.No.723 of 2018 - - - Dated:- 14-8-2018 - T. S. Sivagnanam And Bhavani Subbaroyan, JJ. For the Appellants : Mr.P.R.Renganath For the Respondent : Mrs.Aparna Nandakumar, SPC Mr.Thirumalaisamy JUDGMENT ( Judgment of the Court was delivered by T. S. Sivagnanam, J. ) These appeals have been filed by the assessees against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... witching (MPLS) service based on the invoices issued by BIL. The assessees stated that the BIL are receiving MLPS service from BSNL and Reliance Communications Limited and the server for the same is situated at the premises of BIL. The service has been utilized by BIL for communicating and retrieving the data from the job workers, namely, assessees. The department alleged that the services are rendered by BSNL and Reliance Communications Limited and received by BIL, whereas the BIL have raised the bill on the assessees claiming reimbursement of the above said MLPS charges with the Service Tax. The department pointed out that the invoice was raised for reimbursement of expenses incurred and it appears that no service was rendered by BIL and the availment of credit on the said Service Tax based on the invoices issued by BIL by the assessees is incorrect. Thus, the department opined that the assessees have contravened the provisions of Rule 3 of the Cenvat Credit Rules, 2004, inasmuch as the services were not received by the assessees. Hence, it was held that the assessees have taken ineligible credit and but for the detection by audit officers, these facts would not have come to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid by BIL. Therefore, the correctness, legality or otherwise of the tax paid by subject service provider cannot be called into question by Central Excise Officers having jurisdiction over the assessees availing credit. Thus, it was pointed out that in the show cause notices, the department seeks to object the service tax payment by BIL on the plea that no service has been rendered by BIL to the assessees and this is without jurisdiction. Further, it was pointed out that when payment of service tax by BIL is not in doubt and only to the extent of service charged in the invoice raised on the assesses they have availed the credit, there could be no further enquiry. Further, it was pointed out that the show cause notices incorrectly assume that the BIL have passed on the credit to assessees under Rule 7 of the CENVAT Credit Rules, 2004, and it is further stated that the BIL could transfer credit under Rule 7 of CCR 2004 as ISD only where the recipient is also BIL and in this case, the assessees being a different legal entity, the BIL was not eligible to transfer credit as ISD and therefore, the BIL have not issued invoice as ISD, whereas it has issued invoice as service provider. 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessees. Therefore, the Appellate Authority concluded that the BIL have not rendered any service to the consumption of the assessees. The assessees have preferred an appeal before the Tribunal and the Tribunal, vide impugned order, dismissed the appeal. 9. We find that the reasons assigned by the Tribunal are contained in paragraphs 6.1 and 6.2. The Tribunal was of the view that MPLS and SAP are utilized by BIL for the purpose of monitoring the manufacturing activities of the assessees and there is no contention from the assessees' end that they alone utilized these services. By referring to the reply given by the assessees to the show cause notices, the Tribunal observed that BIL are retrieving data relating to them from the server and are further processing the same for their end use. Further, the Tribunal, in paragraph 6.2, held that the activities performed by BIL for monitoring of production activities of the assessees cannot by any stretch of imagination be considered as an input service or in relation to the manufacture of final products of the assessees and at the most, the billing made by BIL to the assessees can be termed as an arrangement for passing on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. The assessees have taken CENVAT credit on the said ₹ 2/- paid by it as Service Tax to BIL. Therefore, the question would be as to whether the department can dispute the nature of transaction at this juncture, more particularly, when the assessment made on the BIL and the collection of Service Tax on them has not been reopened. 15. From the reasons assigned by the Commissioner (Appeals), we find that the Commissioner (Appeals) has travelled beyond the scope of allegation made in the show cause notices. By giving a different interpretation to the nature of transaction, which, in our considered view, could not have been done by the Appellate Authority in the light of the settled position with regard to the Service Tax liability admitted and paid by BIL. Thefore, unless and until, the assessment on BIL had been reopened, the nature of transaction as referred by BIL has to be held to be wrong and the Commissioner (Appeals) could not have given a different interpretation to the nature of claim made by the BIL from the assessees by interpreting the terminalogy used in the invoice. The correct test, which ought to have been applied by the Adjudicating Authority, Appellate Autho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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