9911796707
TMI Blog2024 (12) TMI 883X X X X Extracts X X X X X X X X Extracts X X X X ..... t of above said confirmed dues. I hereby appropriate Rs.36,95,964.00 already deposited by M BSNL vide e- challan bearing No. 0304395 05122011 52403. against above said inadmissible Cenvat credit; iii. I hereby confirm the demand of interest, at appropriate rate, on above said amount of Cenvat credit, from M/s BSNL, in terms of Rule 14 of Cenvat Credit Rules. 2004 read with Section 75 of the Finance Act, 1994: iv. However, I hereby drop the demand of Cenvat credit of Rs. 25,76,916.00, as discussed in foregoing paras, since allowed as credit. v. I hereby impose a penalty of Rs. 3,70,50,506.00 [Rupees Three Crore Seventy Lakh Fifty Thousand Five Hundred and Six only], on M/s BSNL, in terms of Rule 15 of Cenvat Credit Rules, 2004 read with Section 78 of the Finance Act. 1994; and vi. I hereby do not impose any penalty in terms of Section 76 of the Finance Act. 1994, for the reasons as discussed above;" 2.1 Appellant is engaged in providing Telecommunication Services and are also availing Cenvat credit as admissible under the provisions of Cenvat Credit Rules, 2004. 2.2 During the audit of the records of the appellant for the period from October, 2009 to March 2011, certain di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant places bulk purchase order to their suppliers mentioning therein machines/softwares/ equipments required and also the aspects of AMC, if required. Appellants have a policy in respect of the invoices received against a purchase order use to make 50% payment amount at the time of invoice to be supplied and remaining 50% was paid after being satisfied about the installation/working of the particular machine/ software by way of installation/ inspection report etc. Then the remaining amount is claimed by the supplier by way of issuance of a cover note wherein the reference of the original invoice has been made. * The whole value of the goods/services along with service tax is mentioned on the invoice itself and thereafter there is no reason for department to assume that the appellant had availed the credit on cover notes only. * Due to some confusion in respect of two cover notes referred, appellant had taken credit of entire amount mentioned in the cover note, whereas they were required to take only credit of 50% on noting the same appellant deposited Rs.36,95,964/- vide GAR-7 on 05.12.2011 before the issuance of show cause notice dated 17.10.2013. * This amount is m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot even the claim of the appellant that the CENVAT Credit should be allowed to them on the diesel/ electricity by treating them as input under Rule 2 (k) of the CENVAT Credit Rules, 2004. The fact that service provider has paid service tax on the service provided by him consuming these inputs is not in dispute. We do not find any merits in the findings recorded by the adjudicating authority in respect of this demand and set aside the same. As this demand is set aside the interest and penalty imposed in respect of this demand is also set aside." Thus we set aside the demand made in respect of this issue. 4.4 On the issue at point no.3 matter was considered vide Final Order No.70603 of 2024 dated 30.09.2024, wherein following has been held:- "4.3 Appellant is a Government of India Undertaking providing the same services from different locations across the country. The same issue for denial of the credit availed by the appellant on the basis of Advice of Transfer Debit (ADT) was raised in the jurisdiction of the Salem Commissionerate. Matter was finally decided by the Chennai Bench vide order reported at [2014 (34) STR 378 (T- Chennai) holding as follows: "2. The relevant facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s procedural lapse continued only till the year 2005 and once the department started raising objection on this count, they took registration and started following proper procedures. He submits that since the fact of procurement of capital goods is not disputed and the duty paid thereon also is not disputed and the use of the capital goods in providing taxable service is also not disputed, the Deputy Commissioner concerned having powers vested on him under proviso to Rule 9 of CCR, 2004, he should have condoned the procedural lapse by exercising such power. Since there is no revenue loss to the department, it is his prayer that credit may be allowed and the prayer for imposing penalty may be rejected. He relies on the decision of the Tribunal which has already been relied upon by Commissioner (Appeal) in two cases. 5. Opposing the prayer, ld. AR for Revenue submits that Transfer Advice is not a document specified under Rule 9(1) of the CCR, 2004 against which credit could have been taken. Further transfer advice was backed only by photocopy of invoice and not actual invoice. Further, he submits that these invoices were addressed to the Divisional Engineer, Central Stores, Madurai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earing. 4.5 This order was challenged by the revenue before Hon'ble High Court of Allahabad. Hon'ble High Court as reported at [2019 (366) E.L.T. 619 (All.)] decided the matter holding as follows: "7. The aforesaid Rule clearly lays down that the Cenvat credit shall be taken by the manufacturer or the service provider on the basis of the documents specified thereunder. 8. In view of the above provision the production of the above documents is necessary for availing the Cenvat credit. The Assessing Officer has found that the respondent-assessee has availed the Cenvat credit but on the strength of Advice of Transfer Debit (ATD) issued by BSNL Telecom Electrical District Meerut and BSNL Civil Wings, Meerut and no other document. 9. The CESTAT in the impugned order has also mentioned that the Cenvat credit was availed by the assessee on the basis of Advice of Transfer Debit (ATD) issued by the Central Telephone Store Department supported by Xerox of the original invoices. 10. The Assessing Officer has not recorded any finding that the original invoices were ever supplied or produced to claim the Cenvat credit. 11. No material has been placed before us to indicate that the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court. 4.6 The only issue now remains for consideration is with regards to the credit taken on the 'cover notes'. Original Adjudicating Authority have recorded the following findings on the said issue:- "20. Further, at the time of making payment against these Cover notes, the officers of M/s BSNL has given a certificate on back of these Cover Notes, which is as follows "It is certified material received in correct quantity, good condition and entry made in stock register and paymem has been made after deducting 50% of billed amount & 4% Commercial Tax". On the basis of above remark, the SCN has alleged that the above said Cover Notes relate to supply of material only and on which no Service Tax appears applicable. It is further alleged that the above said Cover Note is not covered as a legitimate document in terms Rule 9 of Cenvat Credit Rules, 2004 to avail Cenvat credit. 21. In their written defence reply, M/s BSNL have argued that the Cenvat credit has actually been taken on the basis of Invoices itself and these Cover Notes has been issued by the supplier service provider for claiming the balance remaining amount. They pointed out that these suppliers are required to deli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d record, M/s BSNL has availed Cenvat credit of Service Tax of Rs. 62,91,872.00 on the basis of Cover Note dated 28.05.2009 whereas the concerned invoices were issued on 26.03.2009. Thus, the Cover Note has been issued after issuance of Invoices by the supplier of the items/services. Further, the Cover Note, on the basis of which M/s BSNL has availed Cenvat credit, pertains to supply of goods only whereas the invoices pertains to supply of software without mentioning any AMC/ upkeep charges, as claimed by M/s BSNL. Similarly. M/s BSNL has availed Cenvat credit of Service Tax of Rs. 5,50,028.00 on the strength of Cover Note dated 07.11.2008 whereas the concerned invoice was issued on 27.11.2007. In this case, too, the supplier of the items/services has issued the Cover Note after issuance of related Invoice. Further, this Cover Note, on the basis ofwhich M/s BSNL has availed Cenvat credit, pertains to supply of goods only whereas the invoice pertains to supply of software without mentioning any AMC/upkeep charges, as claimed by M/s BSNL, 26. Thus, I find that M/s BSNL has availed Cenvat credit of Service Tax on the basis of Cover Notes only and not on the basis of any Invoice Bill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and second time on the basis of cover note needs to be factually verified. As appellant had taken credit of entire amount against these cover notices subsequently, he reversed the excess credit as claimed by them vide GAR challan dated 05.12.2011. No findings has been recorded either in the impugned order with regards to the availment of credit against the invoice in question. The fact in respect of credit taken against the corresponding invoices and cover notes was subject to verification- whether the credit has been taken twice against the same supply of goods/services. The matter needs to go back to the Original Authority for verification. 4.8 We also note that appellant is public sector undertaking. Even if the extended period is invokable for the reason of inadmissible credit taken by the appellant, and penalty imposable on them under section 78. Penalty should have been set aside by invoking the provisions of Section 80 of the Finance Act, 1994. 4.9 Summarizing- In respect of credit on the basis of 'Cover Notes' and 'ADT' is remanded back to the Original Authority for verification of the admissible credit. [ Para 4.5 & 4.7] Demand in respect of credit taken on reimbur ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
