TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>CESTAT allows CENVAT credit on tower materials and pre-fabricated shelters under Chapter 73 following Vodafone precedent</h1> CESTAT New Delhi allowed the appeal regarding CENVAT credit on tower materials and pre-fabricated shelters under Chapter 73 used for transmission tower ... CENVAT Credit - capital goods or inputs - tower materials and pre-fabricated shelters (tower materials) falling under Chapter 73 of the First Schedule of the Tariff Act which materials were used in setting up of the ‘tower’ for transmission - HELD THAT:- The decision of the Tribunal in M/S VODAFONE MOBILE SERVICES LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, JODHPUR – (RAJ.) [2022 (10) TMI 581 - CESTAT NEW DELHI] holds that tower materials would qualify as ‘inputs’ under rule 2(k) of the CENVAT Rules and they would also be capital goods and, therefore, credit could be taken. In view of the aforesaid decision of the Tribunal in Vodafone Mobile Services, the impugned order passed by the Commissioner (Appeals) deserves to be set aside and is set aside. Appeal allowed. Issues:Admissibility of CENVAT credit on tower materials for telecommunication services.Analysis:The appellant, engaged in providing telecommunication services, availed CENVAT credit on tower materials used in setting up transmission towers, treating them as capital goods. The dispute arose when the Assistant Commissioner disallowed the credit, imposed recovery with interest, and penalty under the CENVAT Rules and the Finance Act. The issue was whether tower materials qualified as capital goods or inputs under the CENVAT Rules.The show cause notices alleged that tower materials made of iron did not fall under the definitions of capital goods or inputs, leading to disallowance and recovery. The appellant argued that the materials were parts of base trans receiver stations, base station controllers, and mobile switching centers, thus qualifying as capital goods or inputs. However, the Assistant Commissioner and the Commissioner (Appeals) disallowed the credit entirely under the CENVAT Rules.The appellant appealed this decision, citing a Division Bench Tribunal judgment in Vodafone Mobile Services Ltd. vs. CCE, Jodhpur, which held that tower materials qualified for CENVAT credit. The Tribunal's decision relied on the Delhi High Court's ruling that tower materials were essential for telecommunication services and thus constituted inputs or capital goods under the CENVAT Rules.The Tribunal's judgment emphasized that tower materials were integral to providing telecommunication services, meeting the functional utility test for inputs. Additionally, the materials were considered accessories or components of capital goods, enhancing the efficiency of the services. The Delhi High Court's decision in Vodafone Mobile Services was followed in subsequent Tribunal rulings, confirming the admissibility of CENVAT credit on tower materials.Based on the precedent set in Vodafone Mobile Services and subsequent Tribunal decisions, the Tribunal in the present case set aside the Commissioner (Appeals) order, allowing the appeal and granting consequential relief to the appellant. The judgment highlighted the importance of recognizing tower materials as both inputs and capital goods for availing CENVAT credit in the telecommunication sector.
TaxTMI 
TaxTMI 
