CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

NEW DELHI

PRINCIPAL BENCH

SERVICE TAX APPEAL NO. 50915 OF 2019

(Arising out of Order-in-Original No. 35-36/RK/Commr./CGST/Audit-II/2018-19

issued under C. No. IV (16) HQRS/ADJN/AST/61/2016/5735 dated 28.12.2018

passed by the Commissioner, Central Goods & Service Tax (Audit-II), New Delhi)

Applied Solar Technologies (India)

…Appellant

Pvt. Ltd.

A-5, Saraswati House,

Naraina Industrial Area Phase-II,

New Delhi

VERSUS

The Commissioner, Central

…Respondent

Goods & Service Tax (Audit-II)

EIL Annexe Building, 5^th Floor,

Bhikaji Cama Place, R.K. Puram,

New Delhi-110066

APPEARANCE:

Shri Shrinivas Kotni and Ms. Urvashi Kaira, Advocates for the Appellant

Shri Harshvardhan, Authorized Representative for the Department

CORAM:

HON’BLE MR. JUSTICE DILIP GUPTA, PRESIDENT

HON’BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL)

FINAL ORDER NO. 50060/2023

Date of Hearing: 27.10.2022

Date of Decision: 20.01.2023

JUSTICE DILIP GUPTA:

Applied Solar Technologies (India) Pvt. Ltd¹ has filed this appeal

to assail the order dated 28.12.2018 passed by the Commissioner of

Central Goods and Service Tax (Audit-II), New Delhi², by which the

demand proposed in the show cause notice has been confirmed.

2.

The appellant is engaged in the business of providing Hybrid

Power Solutions to the towers of various telecom service operators.

1.

the appellant

2.

the Commissioner

2

ST/50915/2019

The

appellant

provides

uninterrupted

power

supply

through

solar/diesel systems for the operation and maintenances of such sites

in case power supplied by the Electricity Board is not available for

some reason.

3.

A show cause notice dated 18.04.2016 was issued to the

appellant for the period 2010-11 to 2014-15 regarding non-payment

of service tax of Rs. 69,23,985/- on the advances received from

clients in relation to the services to be provided and regarding

irregular availment of CENVAT credit of Rs.2,28,64,576/- in respect of

capital goods and utilization thereof. The relevant portions of the

show cause notice is reproduced below:

“1.

Non payment of service tax on the advances

received from clients in relation to the services to the

provided.

4. Whereas, during the course of audit, it was

noticed that the assessee had received advance from

M/s Indus Towers Limited during the years 2010-11 &

2011-12

amounting

to

Rs.6,72,23,160/-

for

the

services to be provided but the Service Tax was not

paid on receipt of such advances. The scrutiny of the

agreement namely "Master Hybrid Solar Solution

Installation Operation & Maintenance Agreement"

(RUD-II) between the assessee and M/s Indus

Towers Ltd. (ITL) revealed that the assessee was

to be paid advances for the services as per Para

6.7 of the agreement, which were to be adjusted

towards the payment for the assessee's services

in the last two months of service availment

period. The conditions of the agreement reflected

that these amounts recorded as "Advance” were

not a refundable deposit. Further as per Clause 3.1

of the said agreement, the contract period was 10

years from the contractual takeover date of each of the

Telecom Sites of M/s Indus Tower Ltd. and therefore

the advance receipt has not been adjusted so far as the

3

ST/50915/2019

due date to adjust the advance received towards

payment for services is yet to come.

4.1

Whereas, the said Para 6.7 of the assessee's

agreement with M/s Indus Towers Ltd. whichrefers to

M/s Applied Solar Technology (India) Pvt. Ltd., as

"AST" and M/s Indus Towers Ltd., as "Indus" reads as

follows:-

xxxxxxxxxx

4.6.

Whereas it appears from the above that the

assessee was aware about the nature of their

aforesaid transactions as evident from the different

agreements

entered

into

by

the

assessee

with

M/s Indus Towers Limited and other Customers.

However the assessee still did not pay the Service

Tax amounting to Rs. 69,23,985/- on suc