COMMISSIONER OF CENTRAL EXCISE Vs. DATA INFOSYS LTD.

JUDGEMENT

(1.) THE Department's appeal in this case against order -in -appeal dt. 28 -10 -2004 which set aside the order -in -original denying the Modvat credit of the service tax taken by the respondent.

(2.) BRIEF facts that arise for consideration are that respondents are registered with the authorities for providing online information and database -access and /or retrieval services. The respondent availed the credit on input services for service tax paid by them to BSNL. The respondents were issued a SCN for reversal of such credit availed by them on the ground that input service and out put service do not fall under the same category of services and hence Modvat credit of input service is not eligible to them. The adjudicating authority confirmed the demand and also imposed penalty on the respondent. The Commissioner (Appeals) on an appeal, set aside the order -in -original and allowed the appeal. Hence this appeal by the revenue.

(3.) LD . DR submits that the Service Tax Credit Rules specifically provide that the credit of input service shall be available only which fall in the same category of taxable service as that of out put service. It is his submission that the taxable service provided by the respondent in this case will fall under the category of taxable service provided to a customer, by a commercial concern in relation to on line information and database access or retrieval or both in which electronic form through computer network in any manner, while the service tax paid by the BSNL get covered under the heading of taxable services to a subscriber by the telegraph authority in relation to a leased circuit. It is his submission that the input service leased circuit is not the same as the output service which has been provided by the appellant. It is also submitted that the provisions of Service Tax Credit Rules have to be strictly interpreted in order to grant benefit to the respondent.