M/S. Imperial Communication vs Cce, Salem

(Arising out of Order-in-Appeal No. 88/2014 dated 21.3.2014 passed by the Commissioner of Central Excise (Appeals), Salem)

M/s. Imperial Communication Entrepreneurs (P) Ltd. Appellant

Vs.

CCE, Salem Respondent

Appearance

Shri M. Kannan, Advocate for the Appellant Shri L. Paneerselvam, AC (AR) for the Respondent

CORAM

Honble Shri R. Periasami, Technical Member Honble Shri P. K. Choudhary, Judicial Member

Date of Hearing / Decision: 31.07.2015

Final Order No. 40917 / 2015

Per R. Periasami

The appellant has already paid Rs.1,71,753/- towards the demand confirmed in the adjudication order. After dispensing with the stay application, the appeal itself is taken up for disposal, as the issue involved lies in a narrow compass.

2. The learned counsel for the appellant confirmed that they have not disputed the tax liability and they are not contesting the demand. They filed appeal before the Commissioner (Appeals) only for the eligibility of CENVAT to input service credit.

3. After hearing both sides and on perusal of the records, we find that the Commissioner (Appeals) in the impugned order at para 4 has clearly stated that the dispute regarding the taxability and leviability of service tax has been admitted by the appellant before lower appellate authority and the only issue before him was whether input service tax credit is allowable or not. We find that the appellant is providing internet telecommunication service and the adjudicating authority demanded Rs.3,25,143/- and confirmed on service tax under the above service. We find that the appellants claimed for CENVAT credit on the service tax paid on internet services availed by them from the main service provider for obtaining band width and submitted that it is an input service for their output service. Since the appellants are rendering service and paid service tax under internet telecommunication service, they are eligible for input service credit on the inputs and input services and original documents need to be verified by the adjudicating authority on the admissibility of the claim. Accordingly, we uphold the demand of service tax confirmed in the adjudication order and remand the matter to the adjudicating authority to verify the admissibility of CENVAT credit on the inputs and input service as claimed by the appellant for the period in dispute and if admissible the same may be allowed to the appellants and adjust the CENVAT credit towards the demand of service tax confirmed on the output service.

4. Accordingly, the impugned order is set aside and the appeal is allowed by way of remand to the adjudicating authority to consider the issue of CENVAT credit on inputs and input service and also to re-determine the penalty. The appellants are directed to produce all the necessary documents before the adjudicating authority and the adjudicating authority to give reasonable opportunity of hearing to the appellants. The appeal is allowed by remand and stay application is also disposed of accordingly.

(Dictated and pronounced in open court)

(P.K. CHOUDHARY) (R. PERIASAMI) Judicial Member Tehnical Member

Rex

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