Idea Cellular Ltd vs Commissioner Of Service Tax

IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI

COURT No. II

APPEAL No.ST/87803/14

(Arising out of Order-in-Original No.17/ST/RN/SCL/M-II/13-14 dated 28/02/2014 passed by Commissioner of Central Excise, Mumbai)

For approval and signature:

Honble Mr. P.R. Chandrasekharan, Member (Technical)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : Seen of the Order?

4. Whether Order is to be circulated to the Departmental: Yes authorities?

======================================== Idea Cellular Ltd., Appellant Vs. Commissioner of Service Tax, Mumbai Respondent

Appearance: Shri.Manoj Chauhan, CA for appellant Shri.B K Iyer, Supdt. (AR), for respondent

CORAM: Honble Mr. P.R. Chandrasekharan, Member (Technical)

Date of Hearing : 31/03/2015 Date of Decision : 31/03/2015

ORDER NO

1. The appeal is directed against Order-in-Original No.17/ST/RN/SCL/M-II/13-14 dated 28/02/2014 passed by Commissioner of Central Excise, Mumbai. Vide the impugned order, the learned lower appellate authority has denied Cenvat credit of service tax paid on outdoor catering service amounting to Rs.12,92,408/- to the appellant, M/s.Spice Communication Ltd. (now known as M/s.Idea Cellular Ltd.). He has also ordered for recovery of interest on the credit wrongly taken and has imposed an equivalent amount of penalty under Rule 15 (4) of the Cenvat Credit Rules, 2004 read with Section 78 of the Finance Act, 1994. Hence, the appellant is before me.

2. The learned CA appearing for the appellant submits that the period of credit is from 2004-05 to 2008-09 and during the relevant time the input service definition included in its scope any service used in or in relation to rendering the output service. Only with effect from 01/04/2011, out door catering service was excluded from the scope of input service. Prior to that, catering service was covered within the ambit of input service. He relies on the decision of the Honble High Court of Bombay in the case of CCE, Nagpur Vs. Ultratech Cement Ltd., - 2010 (20) STR 577 (Bom) and this Tribunal decision in the case of SKF Technologies (I) Pvt. Ltd., Vs. CCE, Bangalore  2014-TIOL-576-CESTAT-BANG in support of his contention. Accordingly, he pleads for setting aside the impugned order and allowing the appeal.

3. The learned Superintendent (AR) appearing for the Revenue reiterates the findings of the lower authorities.

4. I have considered the submissions made by both the sides.

4.1 The only reason adduced by the adjudicating authority is that in the Ultratech Cement Ltd. case, the Honble High Court was concerned with a factory employing more than 250 workers whereas in the present case the appellant is an output service provider. Therefore, the facts are distinguishable and hence, the ratio of the High Court decision in the Ultra Tech case is not applicable. I find this reasoning adopted by the adjudicating authority quite illogical and perverse. Input service has been defined under Rule 2 (l) of Cenvat Credit Rules, 2004 and the same as it stood at the relevant time included within the scope any service which was used in or in relation to the rendering of output service. Therefore, the appellant was rightly entitled for the Cenvat credit of the service tax paid on catering service. The ratio of Ultratech Cement Ltd. case decided by the Honble Bombay High Court would apply squarely to the facts of the present case and this Tribunal in a number of cases have followed the same decision and allowed such input service credits. Following the ratio of these decisions in the present case also, I hold that the appellant is eligible for Cenvat credit of service tax paid on outdoor catering service. Thus, I allow the appeal with consequential relief, if any.

(Dictated in Court)

(P.R. Chandrasekharan) Member (Technical)

pj

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