- (1.)This civil miscellaneous appeal is filed by the Revenue as against the order of the Customs, Excise and Service Tax Appellate Tribunal,2013 32 STR 618, allowing the appeal filed by the assessee granting the benefit of Cenvat credit on the Service Tax paid on Access Deficit Charges to BSNL, raising the following substantial question of law:
"Whether the Tribunal has fallen into error by holding that Access Deficit Charge is an input service as per the definition in Rule 2(1) of the Cenvat Credit Rules, 2004?"

The brief facts of the case are as follows:

The assessee in this case availed credit of Service Tax paid on various input services used in providing the taxable service. One of the credits so availed is the Service Tax paid on Access Deficit Charges (ADC) to BSNL. The said ADC is charged by BSNL on the basis of number of calls made by the assessee's subscribers to BSNL at remote locations. The Service Tax was charged by BSNL for the ADC charges and the assessee paid Service Tax thereon. The Department collected the same without demur accepting the same as for telecom services. The Department denied the input credit taken by the assessee on the ground that what is provided by BSNL is a facility and not telecom services. The Department was of the view that Access Deficit Charges are paid by the respondent/assessee for fulfillment of a license obligation and are in no way connected with providing output service. Hence, they are not entitled to take credit of Service Tax paid on Access Deficit Charges. Accordingly, show cause notice was issued to the respondent. The adjudicating authority took the view that it was only a facility extended to connect the end user by BSNL where the networking facility was not feasible for the respondent. Consequently, the adjudicating authority denied the Service Tax credit on the payment towards ADC holding as follows:

"From the foregoing, it would emerge that ADC charges are levied by BSNL to access mostly on rural/remote areas where there is no connectivity by the service provider. Hence it can be inferred that it is only a FACILITY extended, facilitating the service provider to connect the end-user by the BSNL where the networking facility is not feasible by the assessee in question. That apart by rendering the ADC facility, by the BSNL to the assessee cannot be construed by any stretch of imagination as a service, whereby the assessee treat this as an input service qualifies for rendering his output service. This being the situation, availing the Service Tax credit on payment of ADC charges is incorrect in terms of Rule 2(1) of the Cenvat Credit Rules, 2004."

(2.)Aggrieved by the Order-in-Original, the assessee pursued the matter before the Tribunal.
(3.)The Tribunal took the view that the service provided by the BSNL to the assessee is a telecom service as defined under Section 65(109a) of Finance Act, 1994 and held as follows:
"We have considered the arguments on both sides. We are not in agreement with the argument that BSNL is providing only a facility and not any service to the appellant. After classifying the facility provided by BSNL as "Telecom services" and collecting the Service Tax under such head, Revenue cannot turn around and argue that this is not a service. Even otherwise, we are convinced that the service provided by BSNL to the appellant is a Telecom service as defined in Section 65(109a) of Finance Act, 1994. Since this service is required by the appellant for providing output services to appellant's customers, it is obviously an 'input service' as per definition at Rule 2(1) of Cenvat Credit Rules, 2004. Therefore, the appellant is entitled to take Cenvat credit on such services. Therefore, we allow this appeal of the appellant in respect of the first issue."