S. S. GARG :

This order will dispose of three appeals. Two appeals viz.ST/1017/2011 & ST/55426/2013 are filed by the Assessees against the impugned Order-in-Original (‘OIO’) Nos. 11/RDN/2011 dated 30.03.2011 and 167/ST/PKJ/CCE/Adj/2012 dated 15.10.2012 respectively. One appeal viz. ST/1242/2011 is filed by the Revenue against the impugned OIO No. 11/RDN/2011 dated 30.03.2011. All three appeals are taken up together for disposal by this common order. Details of appeals are as under in a tabular form:

2. Briefly stated facts of the present case are that the Assessees, M/s Sistema Shyam Teleservices Ltd were registered centrally as a service provider in the category of Telecommunication Services, Transport of Goods by Road Services, Rent-a-cab Service, Business Support Services, Business Auxiliary Services, Renting of Immovable Property Services, Sponsorship Services, Management & Consultancy Services etc. The Assessees were availing CENVAT Credit of service tax on capital goods, input goods and input services under Cenvat Credit Rules, 2004. They got themselves centrally registered w.e.f. 22.09.2009 under the jurisdiction of Division-II, Gurgaon on shifting of their centralized accounting from Jaipur office to Gurgaon office. They were initially registered for cellular mobile telephone and basic telephone services, and leased circuit and other related services at Jaipur and obtained a centralized registration with Service Tax Authorities in Jaipur w.e.f. 10.05.2007. The department entertained the view that the Assessees had taken inadmissible CENVAT Credit on capital goods, input services and input goods during the relevant period in contravention of Rule 3 & Rule 4 of the Cenvat Credit Rules, which was not admissible to them.

2.1 A show cause notice dated 29.09.2010 was issued to the Assessees proposing denial and recovery of Rs.2,17,21,367/- being ineligible CENVAT Credit taken and utilized for the period Oct 2008 to March 2010. It was also alleged in the show cause notice that the Assessees had shown the opening balance of CENVAT Credit of Rs.1,71,37,92,147/- reflected in column 5B(a) of ST-3 Retuns filed for the period Oct 2009 to March 2010 before Gurgaon Division office, after obtaining centralized registration. It was further alleged that the said amount of CENVAT Credit was not eligible to the Assessees as they had not shifted their business as required under Rule 10(2) of the Cenvat Credit Rules; they had only shifted their centralized accounting function to their Gurgaon office from Jaipur; therefore, Rule 10 of the Cenvat Credit Rules was not applicable in the instant case and consequently the said amount of credit was not admissible to them and the same was liable to be denied and recovered from the Assessees along with interest and penalties. The Assessees filed their reply controverted the allegations in the said show cause notice, and after following the due process, the Adjudicating Authority vide impugned OIO dated 30.03.2011 ordered for recovery of Rs.2,17,21,367/- being ineligible credit taken and utilized by the Assessees along with interest and also imposed equal penalty under Section 78 of the Finance Act and penalty of Rs.5,000/- under Section 77 of the Act. However, the Adjudicating Authority dropped the demand of Rs.1,71,37,92,147/- and refrained from imposing penalty under Section 76 of the Act.

2.2 Subsequently, another show cause notice dated 19.09.2011 was issued proposing to deny and recover the CENVAT Credit of Rs.2,69,44,687/- for the period 2010-11 on the same grounds that the Assessees had availed/utilized credit on capital goods and input services used for fabrication of towers, which resulted in immovable property, which was not admissible to them in terms of Cenvat Credit Rules. After following the due process, the Adjudicating Authority vide impugned OIO dated 15.10.2012 confirmed the demand of Rs.2,69,44,687/- along with interest thereon and also imposed penalty of Rs.200