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Issues: Whether CENVAT credit was admissible on towers, tower parts, shelters and prefabricated buildings used by a telecom service provider for providing output services, either as capital goods or as inputs under the CENVAT Credit Rules, 2004, and whether those goods lost their character as goods upon being embedded in the earth.
Analysis: The claim for credit was examined in the light of the definitions of capital goods and inputs under Rule 2(a)(A) and Rule 2(k) of the CENVAT Credit Rules, 2004, together with the scheme of Rule 3. The Court held that the issue was already concluded by the binding decision in Bharti Airtel, which had considered the same statutory provisions and had held that towers and related structures, once erected, became immovable property and did not qualify either as capital goods or as inputs for the purpose of service tax credit. The Court also held that a coordinate Bench was bound to follow that interpretation and could not reopen it merely because a different view was urged on the same provisions.
Conclusion: Credit of duty paid on towers, tower parts, shelters and prefabricated buildings was not admissible and the appeals failed.
Ratio Decidendi: Where towers and similar telecom structures, after erection, are immovable and do not fall within the defined categories of capital goods or inputs under the CENVAT Credit Rules, 2004, CENVAT credit is not available to the service provider.
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