Order Date – 12 January 2024

Parties: M/s Bharat Sanchar Nigam Ltd. Vs The Commissioner of Central Excise And Service Tax, Chandigarh-I

Facts –

• The Appellant, M/s Bharat Sanchar Nigam Ltd. (BSNL), is a Public Sector Undertaking engaged in providing Telecommunication and Cellular Mobile Network Services; they have received certain input services and availed credit of the same as distributed, by their Head Office, Shimla Circle, as ISD.
• A show cause notice was issued disputing the availment of such credit on the ground that the document on which credit has been taken is not a proper document under Rule 9(g) of CENVAT Credit Rules read with Rule 4A(2) of Service Tax Rules, 1994 and that the ISD themselves did not have proper proof of payment to the service provider.

Issue –

• Whether the appellants are eligible to avail credit when the documents are alleged to be non-conforming to the provisions of Credit Rules, 2004?

Order –

• The Tribunal observed that credit cannot be denied on the basis that the distribution was not on the basis of proper documents. Moreover, as submitted by the learned Counsel for the appellants, the admissibility of CENVAT credit has not been questioned and no proceedings have been initiated against the ISD questioning the availment of credit or excess distribution etc.
• Hence held that when the availment of services and admissibility of credit are not questioned at the end of the appellant or the ISD, CENVAT credit cannot be denied; substantive benefit of CENVAT credit cannot be denied just because there were some procedural infractions.
• Further the appellants have been regularly submitting the ST-3 Returns. Moreover, keeping in view the fact that the appellants are a PSU, no mala fide intention can be attributed to the appellant. It was found that different Benches of the Tribunal have been continuously holding the same.
• In view of the above, the appeal is allowed both on merits and limitation.