BSNL Vs. COMMISSIONER OF CENTRAL EXCISE, SALEM

JUDGEMENT

(1.) THE appellants are engaged in the business of providing telephone services throughout India. However, they discharge service tax liability separately on services rendered by different Secondary Switching Areas (SSAs) of the appellant and each SSA is registered under Service Tax Laws.

(2.) The issue involved in this appeal is that the appellants namely BSNL, Salem had taken Cenvat credit on certain equipments installed at other SSAs and such credit cannot be allowed because the equipments were not used in the premises of the entity paying service tax namely BSNL Salem. Revenue proposed to deny Cenvat credit on such equipment installed in other SSAs. After due proceedings, a service tax demand of Rs. 1,15,86,320/ - is confirmed for the period 2005 -06 and for the period 2006 -07 along with interest. Further, a penalty of Rs. 10,000/ - is imposed under Rule 15 of the Cenvat Credit Rules, 2004. This is a second round of litigation. In the first round of litigation when the appellants came up in appeal before the Tribunal in S/134/2007 [ : 2009 (14) S.T.R. 674 (Tri. -Chennai)], the Tribunal directed as under: -

(3.) THUS it is established that credit has been taken only once against the equipments installed. The issue is that DGM (Projects) situated at Salem has placed orders for making these equipments for different SSAs within his jurisdiction because he was overseeing implementation of all such projects and he handed over the duty paying documents in relation to such capital goods procured by them to one of the SSAs in his jurisdiction namely BSNL, Salem and they have taken credit on the basis of such documents and used it for discharging their service tax liability. There is no dispute that credit has been taken only once on the same equipment and that these goods have been used in the premises of BSNL and not moved out of such premises.