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TMI Blog2025 (3) TMI 196X X X X Extracts X X X X X X X X Extracts X X X X ..... making this demand and the demand should be restricted to normal period of limitation. Admissibility of Cenvat credit - HELD THAT:- There are no reason to disagree with the findings recorded in the impugned order. The credit have to be allowed strictly as per the provisions of the Cenvat Credit Rules and appellant should have taken the credit within one year from the date of submission of document against which credit has been taken. In the case of Kusum Ingots & Alloys Ltd. [2000 (7) TMI 108 - CEGAT, NEW DELHI] referred by Authorised Representative appearing for revenue, Tribunal have upheld the denial of credit taken beyond the period prescribed by Central Excise Rules, 1944 - it is not inclined to allow the benefit of Cenvat credit availed in respect of the documents which admissibly are more than one year beyond one year from the date of issuance of show cause notice which goes contrary to Rule 4 of Cenvat Credit Rules. Extended period of limitation - HELD THAT:- The extended period of limitation could not have been invoked in this matter, therefore, penalties imposed under Section 78 is also set aside. Conclusion - i) The appellants are not providing any branded service to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BLE NETWORK 144/ST/Alld/2021 dated 04/06/2021 I have taken appeal mentioned at Sl No 3 as reference appeal for recording the facts and findings. 1.2 This appeal is directed against Order-in-Appeal No.158/ST/Alld/2021 dated 21/06/2021 passed by Commissioner (Appeals) Customs, Central Excise & CGST, Allahabad. By the impugned order following has been held:- "4.10 In view of the above, I modify the impugned Order dated 31.07.2020, as under:- (i) Confirmation of demand of Service Tax (including Cesses) is reduced to Rs.4,72,610/ alongwith interest, (ii) Penalty imposed upon the appellant, under Section 78 of the Act, is reduced to Ra 4,72,610/-; and (iii) Penalty imposed under Sections 77(1)(a), 77(1)(b), 77(1)(c) & 77(2) of the Act, shall remain unchanged." 2.1 On the basis of specific intelligence that appellant was providing Cable Operator Services taxable under Finance Act, 1994 without obtaining service tax registration and without paying service tax. Inquiry was initiated against them. 2.2 Inquiry and investigations made, revealed that appellant during the period from 2013-14 to 2017-18 (upto June, 2017) did not pay service tax including cess of Rs.9,86,500/-. They w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cause Notice, I confirm the demand of Service Tax of Rs.6,48,454/- (including Cess). under proviso to Section 7311) of Finance Act 1994, read with Section 174(2) of the CGST Act, 2017. against M/s Sana Cable Network (Proprietor Mohd Races Ahamad), 77/109, Coolie Bazar, Kanpur which is recoverable from him along with Interest under Section 75 of the Finance Act. 1994. Remaining demand of service tax of Rs.3,38,056/- is hereby dropped. (ii) I impose penalty of Rs.6,48,454/- under Section 78 of the Finance Act, 1994 upon M/s. Sana Cable Network (Proprietor Mohd. Races Ahamad), 77/109. Coolie Bazar, Kanpur. (iii) I impose penalty of Rs. 10,000/- each under Section 77(1)(a).77(1)(b). & 77(1)(c) of the Finarnice Act, 1994 upon M/s. Sana Cable Network (Proprietor Mohd Raees Ahamad), 77/109, Coolie Bazar, Kanpur. (iv) I impose penalty of Rs. 10,000/- upon M/s Sana Cable Network (Proprietor Mohd. Races Ahamad). 77/109, Coolie Bazar, Kanpur under Section 77(2) of the Chapter V of the Finance Act, 1994 for contravention of Section 70 of the read with Rule 7 of the Rules ibid." 2.5 Aggrieved appellant have filed appeal before Commissioner (Appeals) which has been dismissed as per the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the meaning assigned to it in clause (b) of Section 2 of the Cable Television Networks (Regulation) Act, 1995 (7 of 1995). Further, as per Section 2(aa) of the Cable Television Networks (Regulation) Act, 1995 (7 of 1995) (here-in-after referred to as 'CTN Act'), "cable operator means any person who provides cable service through a cable television network or otherwise controls or is responsible for the management and operation of a cable television network and fulfills the prescribed eligibility criteria and conditions. Also, Section 2(b) of the CTN Act, "cable service" means the transmission by cables of programmes including re-transmission by cables of any broadcast television signals. Further, "the cable television network is defined as per Section 2(c) of the CTN Act to mean any system consisting of a set of closed transmission paths and associated signal generation, control and distribution equipment, designed to provide cable service for reception by multiple subscribers. "Subscriber is defined as per Section 2(i) of the CTN Act to mean any individual or association of individuals or a company or any other organization or body who receives the signals of cable televis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... signals from the broadcasters/aggregators. They entered into agreements with the broadcasters who provide the integrated receiver decoder boxes (IRD) to receive the signals in the encrypted form. These boxes were installed by the MSO. The MSO then transmits the signals either through the LCO or directly to the subscribers. When the MSO provides the service through the local cable operator who would then re-transmit the broadcast television signals by the cable to the last mile subscriber, then such a LCO is the cable operator. The definition of the cable operator as per Section 2(aa) of the CTN Act states that a "cable operator" means any person who provides cable service through a Cable Television Network or otherwise controls or is responsible for management and operation of Cable Television Network and fulfills the prescribed eligibility criteria and conditions. The "Cable Television Network as per section 2(c) of the CTN on other hand means any system consisting of a set of closed transmission paths and associated signal generation, control and distribution equipment designed to provide cable service for reception by multiple subscribers. Hence there are two main ingredients i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a cable operator including "a Multi System Operator", contention raised on behalf of the petitioners that Multi System Operator was not liable to pay service tax, unless service was rendered to a viewer or consumer, has no merit. Similarly, contention that service tax is required to be paid twice on the same service is also without any merit". Thus, it is evident that the appellant has misconstrued the said judgment of the Hon'ble High Court of Punjab & Hariyana. Relevant portion of the judgment is as under: 7. In the reply filed on behalf of the Commissioner Central Excise Service Tax, it is submitted that since w.e.f 10-9- 2004, "taxable service has been re-defined to mean service provided to "any person", it was not necessary that the cable operator must be providing Bervices to "any customer". Definition of "cable service" under Section 65(22) is as per definition under Section 2(b) of the Cable Television Networks (Regulation) Act, 1995 which 49 "cable service" means transmission by cables of programmes including retransmission by cable of any broadcast Television signals." 7.1 Thus, the said definition also includes services provided by "Multi System Operator". It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paying service tax, therefore, the signals provided by the MSO to the appellants is an input services for the appellants. Therefore, the service tax paid by the MSO is available as Cenvat credit to the appellants" Applying the ratio decided in the above decision of the Hon'ble CESTAT, I hold that the appellant is entitled to the Cenvat credit of service tax paid to MSO. However, the Cenvat credit of total service tax amount on input service used for providing taxable service during relevant financial years is allowed to the appellant subject to fulfillment of other such conditions as provided under the Cenvat Credit Rules, 2004 for the admissibility of the same 1 observe that the appellant in the present case did not comply with the provisions contained under Rule 4(7), 9(6) & 9/9) of the CENVAT Credit Rules, 2004 inasmuch as they failed to take Cenvat credit, if any, within one year of issuance of invoices and to submit ST-3 returns for the relevant period & also failed to maintain proper records of CENVAT credit. Therefore, I am of the considered opinion that the appellant is not eligible for CENVAT credit due to non- fulfillment of condition mentioned in the Rule 4(7), 9(6) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsequently they are entitled for exemption under Notification No.6/2005-ST dated 01.03.2005 and Notification No. 33/2012-ST dated 20.06.2012. b) Whether the extended period of limitation is invokable or not? c) Whether the best judgement under Section 72 of the Finance Act, 1994 has been assessed correctly or not? d) Whether the appellants are liable to pay service tax on the gross value of the services provided by them or not? e) Whether the appellants are entitled for cenvat credit of service tax paid by the MSO or not? 12. Whether the appellants are providing branded service or not? Consequently they are entitled for exemption under Notification No. 6/2005-ST dated 01.03.2005 and Notification No. 33/2012-ST dated 20.06.2012. In this case, the appellants are cable operator and providing cable services to the subscribers on the basis of signals received from the MSO. The subscriber has not asked for any brand for providing the said services. In fact, the appellant is also not providing any branded service as MSO is supplying signal to the appellants which has been transmitted to the subscribers, in that circumstances, there is no relation of brand name to the ultima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not for the purpose of enhancing the value of the jute bags by indicating a connection in the course of trade between the aforesaid products and the manufacturer of those products." Further, in the case of Maheshwari Industries (supra), the Hon'ble Apex Court observed the criteria for use of brand name which is as follows:- "1) It must be a name or mark such as symbol, monogram, label, signature or invented word or writing; (2) It must be used in relation to such specified goods, for the purpose of indicating a connection in the course of trade between such goods and some person using such name or mark, with or without any indication of the identity of that person; and (3) The mere fact that the specified goods manufactured by a person bear a brand name or trade name of another manufacturer, is not sufficient to conclude that those goods are manufactured by such other manufacturer or trader. 19. Therefore, it is clear that a person may be taken to be manufacturing specified goods, bearing a brand name or trade name only if the name, mark or symbol used as such, is intended to indicate a connection in the course of trade between such specified goods and some person u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orrows the definitions of Cable operator" and "Cable service" from Cable Television Network (Regulation) Act, 1995. Considering scope of definition under Section 2(aa) of the said Act there is a possibility of bona fide belief for non-tax liability. Considering the ratio followed by the Tribunal in the abovementioned cases and also considering the facts of the present case, I find that it is a fit case for invoking the provision of Section 80 for waiver of penalties imposed on the appellant. Accordingly, the penalties are set aside and the appeal is allowed only to that extent." Therefore, no penalty is imposable on the appellants. c) Whether the best judgement under Section 72 of the Finance Act, 1994 has been assessed correctly or not? In this case, it is a fact on record, the appellants were not given time of supply the data of their activity and assessment has been done on the basis of the data supplied by the MSO which is not correct, therefore, we hold that the assessment under Section 72 of the Finance Act, 1994 is not correct. In that circumstances, the impugned demand is not sustainable, but the appellants are directed to provide the data for their activity within th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts are remitting to the MSO on which the MSO is paying service tax, therefore, the signal provided by the MSO to the appellant is an input services for the appellants. Therefore, the service tax paid by the MSO is available as cenvat credit to the appellants. In these circumstances, we hold that the appellants are entitled to avail cenvat credit of the service tax paid by the MSO. 13. In view of the above, the following order is passed:- a) the appellants are entitled for exemption under Notification No. 6/2005-ST dated 01.03.2005 and Notification No. 33/2012-ST dated 20.06.2012. b) the extended period of limitation is not invokable. Consequently, no penalty is imposable on the appellants. c) the appellants are liable to pay service tax on the gross value of services received by them and is entitled to avail cenvat credit of service tax paid on the amount remitted to the MSO. d) The adjudicating authority shall quantify the demand for the period within the period of limitation on production of data of services provided by the appellants of cable services to the subscribers within the 30 days of receipt of this order on which the appellant shall paid the service tax if p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le. A manufacturer who is working under the Modvat Scheme can certainly utilise the credit of the duty paid on the inputs used in or in relation to the manufacture of final product for payment of duty on such final product; but he has to take credit on such inputs within six months from the date of issue of the duty paying documents. After the amendment credit cannot be taken on duty paying documents which are more than 6 months old. 13. In view of the above discussions, we answer the question referred to Larger Bench in the favour of Revenue. Therefore, the view taken in case of Osram Surya Pvt. Ltd. v. Commissioner of Central Excise, Indore, reported in 1998 (29) RLT 684 is the correct view and the contrary view taken in correct. 14. No other issue is involved in the appeals. Therefore, the appeals are being taken up for disposal. The appellants availed the benefit of Modvat credit on documents after six months from the date of their issue. After amendment to Rule 57G of Central Excise Act, the appellants are not entitled to such credit. The appeals are accordingly dismissed." 4.6 I also note that the view taken by the Tribunal have approved by Hon'ble Supreme Court in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arding the principle of limitation, to test the argument of the applicants. 11. The law of limitation is based on delay and laches. It does not bar the right but the remedy. One of the most important and universal rules (which is not, however, without exception in English law) is that time, when it has once commenced to run in any case will not cease to do so by reason of any subsequent event which may be within the saving of the statute. Of this there is a well-known instance drawn from the time of the English civil wars. In answer to a plea of the statute, the plaintiff replied that a civil war had broken out, and the Government was usurped by certain traitors and rebels, which hindered the course of justice, and by which the courts were shut upon and that within six years after the war ended he commenced his action and yet his replication was held to be bad. 12. The law of limitation is not one of substance but of procedure. The object of prescribing limitation is to put an end to itigation, or to state it in other words, litigation may attain a finality. 13. The other principle of interpretation while dealing with the provisions of a fiscal statute is that a fiscal statut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d judgment of the Tribunal is of no avail to the applicant for the reasons more than one. Firstly, no principle of law has been discussed therein and secondly, the Tribunal had not the advantage of the authoritative pronouncement of the Apex Court in the case of Osram Surya (P) Ltd. (supra) which came into existence subsequently. 4.8 Thus, I am not inclined to allow the benefit of Cenvat credit availed in respect of the documents which admissibly are more than one year beyond one year from the date of issuance of show cause notice which goes contrary to Rule 4 of Cenvat Credit Rules. 4.9 As I find that extended period of limitation could not have been invoked in this matter, therefore, penalties imposed under Section 78 is also set aside. 4.10 I also note that appellants have as per additional submissions filed, claimed that they have made a deposits as indicated in the table below for the period in dispute. These amount needs to be adjusted against the demand would be worked out for the normal period, in the light of above observations made in previous paras. S No APPEAL No. Amount Deposited as per additional submissions, in Rs 1 2 3 1 ST/70605/2021 ----------- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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