CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL CHENNAI REGIONAL BENCH – COURT NO. I Service Tax Appeal No. 41444 of 2016 (Arising out of Order-in-Appeal No. 207/2016 (STA-I) dated 23.03.2016 passed by the Commissioner of Service Tax (Appeals-I), Newry Towers, 3^rd Floor, Plot No.2054, I Block, II Avenue, Anna Nagar, Chennai 600 040)

M/s. Bank of India ...Appellant Main Branch, 30, Errabalu Chetty Street, Chennai - 600 001.

Versus The Commissioner of GST & Central Excise, ...Respondent Chennai North Commissionerate, 26/1, Mahatma Gandhi Road, Nungambakkam Chennai 600 034 APPEARANCE:

For the Appellant : Mr. N. Viswanathan, Advocate For the Respondent : Ms. Anandalakshmi Ganeshram, Authorised Representative CORAM:

HON’BLE MR. AJAYAN T.V, MEMBER (JUDICIAL)

FINAL ORDER No.40276/2026 DATE OF HEARING: 05.02.2026 DATE OF DECISION: 20.02.2026 Per AJAYAN T.V.

Bank of India, the appellant herein has taken exception to the Order in Appeal No.207/2016 (STA – I) dated 23.03.2016 (the impugned order), whereby the Appellate Authority has upheld the Order in Original No.141/2011 dated 12.12.2011.

2. Brief facts are that the appellant, a public sector bank, is registered as a provider of Banking and Other Financial Services (BOFS). During the course of audit, it was noticed that the appellant had availed Cenvat credit of Rs.21,98,266/- on input services during the period from June 2005 to March 2009 which were transferred from their zonal office, which was not registered as Input Service Distributor (ISD) in terms of Service Tax (Registration of Special Category of Persons) Rules 2005. It was also ascertained that the appellant was availing exemption under Notification No.13/2004-ST dated 10.09.2004 in respect of service provided to Government in relation to collection of duties and taxes. The appellant was found to be availing Cenvat credit in respect of common input services like Telephone, Audit Fees etc which are used for providing both taxable and exempted services. However, the appellant has not maintained separate accounts for receipt, consumption and inventory of input services meant for use in dutiable output service / exempted output services in terms of Rule 6 (2) of Cenvat credit Rules 2004. In as much as the appellant was providing both exempted and taxable service, the Department was of the view that the appellant ought to have restricted the availment of Cenvat credit to the extent of 20% of the taxable amount upto March 2008 and from April 2008 they ought to have followed the procedure prescribed under the amended Rule 6(3) of the Cenvat Credit Rules, 2004. Instead they were found to have utilised Cenvat credit wrongly in excess to the tune of Rs.10,85,220/- for the period from 2006-07 to 2007-08. From April 2008, the appellant had not utilized the cenvat credit as per the prescribed formula for the period 2008-09.

3. Hence a Show Cause Notice dated 17.03.2010 was issued and after due process of law, the Ld. Adjudicating Authority passed the Order in Original confirming the demand of the amount of Rs.32,83,486/- being the wrong availment of cenvat credit, appropriate Rs.6,96,775/- paid by the appellant towards the demand, imposing penalty under Section 77 and 78 of the Act. Aggrieved, the appellant preferred an appeal before the Appellate Authority, who has confirmed the demand vide the impugned order. Hence this appeal.

4. Shri N. Viswanathan, Ld. Advocate appearing on behalf of the appellant submitted that the zonal office and the appellant name branch are located in the same premises and the zonal office had only administrative power and all the financial transactions were effected by the appellant. It was also urged that the entire input service of which credit was taken, was taken only by them along with the zonal office or by the zonal office at Chennai and did not relate to any of the other branches of the bank falling within the jurisdiction of the zonal office. It was also submitted that they had in their reply averred that