BSNL Vs. COMMISSIONER OF C. EX., SALEM

JUDGEMENT

(1.) HEARD both sides. The appellants M/s. BSNL is a public sector undertaking, which provides telephone services. They have installations all over the country. The present case relates to the jurisdiction of the Dy. General Manager (Projects) at Salem having control over secondary switching areas at Salem, Trichy, Coimbatore and Kumbakonam. The impugned capital goods were purchased by the DGM (Projects) at Salem and the credit in respect of duty paid on such goods was taken at Salem. The department's case disallowing the credit is based on the fact that the impugned capital equipments were supplied directly to the secondary switching areas at Trichy, Coimbatore and Kumbakonam. We find that under the relevant Cenvat Credit Rules, the requirement is that capital goods should be used for providing out put service and that the same should be received in the premises of the provider of the out put service. We further note that service tax assessee having taken registration at multiple locations can distribute the credit available to it to different locations. Considering the above, and also considering the fact that BSNL as a whole is a service tax assessee, though its different units have taken service tax registration at different places, prima facie they are eligible to take credit in respect of capital goods received at the secondary switching areas in the jurisdiction of the DGM (Projects), Salem, centrally at one place namely Salem. Hence, we are of the prima facie view that the appellants have a good case on merit, and hence, we waive the requirement of predeposit during the pendency of the appeal.