2016 (8) TMI 1284 - AT - Central Excise

Successful appeal allows Cenvat credit on services for erecting telecom towers.

Bharat Sanchar Nigam Ltd. Versus Commissioner of C. Ex., Chandigarh-I

The appeal was successful as the denial of Cenvat credit on services related to the erection of telecom towers was deemed inappropriate. Despite not ... CENVAT credit - telecom towers/erection of towers - denial on the ground that telecom towers/erection of towers are neither goods nor input for the appellant - Held that: - Installation of telecom towers are for the purpose of providing the out-put service by the appellant - Since the disputed services have been used by the appellant for erection of the telecom towers, which is used for providing the taxable output service, it will not be appropriate to deny the Cenvat benefit - appeal allowed - decided in favor of appellant. Issues: Denial of Cenvat credit on services related to erection of telecom towers.Analysis:The appeal in this case was against an order passed by the Commissioner (Appeals), Customs & Central Excise, Chandigarh, denying Cenvat credit taken by the appellant on various services related to the erection of telecom towers. The authorities contended that telecom towers/erection of towers did not qualify as goods or inputs for the appellant. However, the appellant argued that the disputed services fell under the definition of input service and thus, the denial of Cenvat credit was unjustified. The appellant, a service tax assessee registered under the Service Tax statute for providing telecom services, asserted that the installation of telecom towers was essential for delivering the output service. While it was acknowledged that the services in question did not strictly align with the definition of 'input service' as per the Cenvat Credit Rules, 2004, it was noted that these services were utilized for erecting telecom towers, crucial for providing taxable output services.Upon reviewing the submissions and records, it was determined that the disputed services, although not fitting the exact definition of 'input service,' were integral to the erection of telecom towers, which were essential for delivering taxable output services. Consequently, the denial of Cenvat credit on these services was deemed inappropriate. The Judicial Member opined that since the services were utilized for erecting towers crucial for providing taxable services, it would be unjust to withhold the Cenvat benefit. Therefore, the impugned order was found lacking in merit, subsequently set aside, and the appeal was allowed in favor of the appellant.