BSNL Vs. COMMR. OF C. EX., THIRUVANANTHAPURAM

JUDGEMENT

(1.) THIS application is filed by M/s. BSNL for waiver of pre -deposit of an amount of Rs. 12,13,90,286/ - demanded from them being cenvat credit utilized by them during the period April, 2005 to September, 2006 violating Cenvat Credit Rules, 2004 (CCR) to pay Service tax. The application also covers various penalties imposed on the appellant including an amount of Rs. 12,13,90,286/ - under Section 78 of the Finance Act, 1994 (the Act) as well as interest applicable on the service tax demanded.

(2.) AFTER hearing the stay petition for some time, we find that the appeal itself can be disposed of at this stage without further hearing.

(3.) THE demand is confirmed on the ground that the assessee has utilized credit in excess of 20% of the tax paid every month. Moving the application for waiver, the ld. Counsel for the appellant submits that the above restriction applied only in respect of credit relating to inputs and input services. He submits that out of a demand of over Rs. 12.13 crores, Service tax was paid utilizing capital goods credit to the extent of over Rs. l2 crores. The Commissioner had erroneously held that the restriction imposed under Rule 6(3) of the Cenvat Credit Rules, 2004 (CCR) applied to utilization of capital goods credit as well. He submits that the matter needs to be remanded to the Commissioner for fresh adjudication in view of the error in his finding. It is also his submission that an amount of Rs. 6.5 lakhs was erroneously confirmed against the appellant. This amount was found due on charges for detailed billing, cancellation of SIM cards and for providing fancy numbers. He submits that these are not exigible to Service tax as not being output service of BSNL. Yet another submission is that the demand is barred by limitation.