TaxTMI 
TaxTMI 
2014 (9) TMI 647
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....p; (i) They were planning for providing 'Passive Telecom Infrastructure' by its installation at various sites to be used by the Cellular Telecom Operators, which could be shared by two or more Operators, while the appellant was to operate and maintain the 'Passive Telecom Infrastructure' and provide committed uptime in excess of 99% to the Operators. (ii) In this proposed business plan of the Appellant, multiple Cellular Telecom Operators then could share the said 'Passive Telecom Infrastructure' by putting their antennas and other equipment, to send and receive electronic signals for their Cellular Telephony Services. (iii) The proposed revenue model for appellant comprised of - (a) Provisioning of charges for providing the 'Passive Telecom Infrastructure' to the Cellular Operators for enabling them to provide their 'Cellular Telephony Services', and (b) Operations and Maintenance Fees for operating and maintaining the said Passive Telecom Infrastructure. The appellants sought cla....
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....t the appellant being a service provider is entitled to take Cenvat Credit as per the Rule 2(k)(ii) of the Cenvat Credit Rules 2004. It is further submitted by the Ld. Counsel that initially appellant took the Cenvat Credit as capital goods but if these are not capital goods then it was pleaded that same may be treated as inputs for providing output service. He also submits that in the impugned order, the adjudicating authority has gone on the premise that as appellant is a manufacturer of goods which get attached to the earth and become immovable goods. Therefore, the same are not excisable goods, hence credit is not allowed. In fact the appellant is providing service and service provider is entitled to avail Cenvat Credit as per Rule 2(k)(ii) of the Cenvat Credit Rules, 2004. It is also submitted that the adjudicating authority has highly relied on the decision of Bharti Airtel Ltd. (supra). The said case has no relevance to the facts of this case. As in the said case, the assessee was a Cellular Phone Service Provider/Telecom Operator and to provide the said service they installed certain towers which become immoveable as per Circular No. 137/315/2007-CX-4 dt. 26.2.2008. In the ....
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.... are charged under the category as erection and commissioning of telecom tower. In all other situations, Cenvat Credit on input goods cannot be availed as the principle of relationship and nexus with the output service is not established in terms of Section 37(2) of the Central Excise Act, 1994. It is submitted that in this case the output service on which input goods is sought to be availed is running of telecom tower. The input goods namely cement and steel have no relationship with output service namely running of telecom tower. Therefore, the credit on these goods cannot be availed in relation to the service tax activity of renting of telecom tower. Therefore the appellants are not entitled for Cenvat Credit. 6. Heard both sides and considered their detailed submissions. 7. To conclude the issue in hand, first we have to examine the provisions of Cenvat Credit Rules for availment of Cenvat Credit, as the appellant has contended that they are claiming that Cenvat Credit be allowed on the goods in question as inputs. Therefore, we are not discussing the issue whether the appellants are entitled to Cenvat Credit as capital goods. In these circumstances, we may examine the defini....
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....anations has no relevance to the facts of this case. As per Rule 2 (k) (ii) of the Cenvat Credit Rules, 2004 all goods are entitled for Cenvat Credit which are used for providing any output service. In this case nowhere it is disputed by any of the parties that the tower/BTS cabins were not used by the appellant for providing service namely 'Business Auxiliary Service'. Therefore, the Cenvat Credit cannot be denied. These facts have not been appreciated by the adjudicating authority and the adjudicating authority heavily relied on the definition of inputs as per Rule 2(k) (i) and Explanation-II to the said Rule. We also find that before discharging their service tax liability, the appellant narrated activity undertaken by them to the Revenue and Revenue directed the appellant to pay service tax under the category of 'Business Auxiliary Service' on the said activity. In that case the Cenvat Credit taken on the inputs for providing that service is entitled for Cenvat Credit as per Rule 2(k) (ii) of the Cenvat Credit Rules, 2004. Further, we find that the adjudicating authority has heavily relied upon the decision of Bharti Airtel Ltd. (supra); in the said case the fac....
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.... the case of Commissioner of C.Ex., & S.T., LTU, Bangalore Vs. Bill Forge Pvt. Ltd. reported in 2012 (279) ELT 209 (Kar.). 11. We have examined the decision of Bill Forge Pvt. Ltd. (supra) wherein the Rule 14 of the Cenvat Credit Rules 2004 was examined which states that where the Cenvat credit has been taken or utilized wrongly or has been erroneously refunded the same along with interest shall be recovered from the manufacturer or the provider of output service. 12. After examining the said provisions of Rule 14 of the Cenvat Credit Rules, 2004 the Hon'ble High Court also considered the decision of Union of India Vs. Ind-Swift Laboratories Ltd. reported in 2011 (265) ELT 3 (SC) and arrived at a decision as under: 16. The Apex Court in the case of UNION OF INDIA vs. M/s. IND-SWIFT LABORATORIES LTD., - in Civil Appeal No.1976/2011 [2011 (265) E.L.T. 3 (S.C.)] interpreting Rule 14 of CENVAT Credit Rules, 2004 held as under:- 2. A bare reading of the said Rule would indicate that the manufacturer or the provider of the output service becomes liable to pay interest alongwith the duty where CENVAT credit has been tak....
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....ue and payable. Therefore, the High Court erroneously held that interest cannot be claimed from the date of wrong availment of CENVAT credit and that it should only be payable from the date when CENVAT credit is wrongly utilized. Besides, the rule of reading down is in itself a rule of harmonious construction in a different name. It is generally utilized to straighten the crudities or ignoring out the creases to make a statute workable. This Court has repeatedly laid down that in the garb of reading down a provision it is not open to read words and expressions not found in the provision/ statute and thus venture into a kind of judicial legislation. It is also held by this Court that the Rule of reading down is to be used for the limited purpose of making a particular provision workable and to bring it in harmony with other provisions of the statute. XX XX XX XX XX XX 2. Therefore, the attempt of the High Court to read down the provision by way substituting the word "OR" by an "AND" so as to give relief to....
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....the case before the Apex Court, the assessee received inputs and capital goods from various manufacturers/ dealers and availed Cenvat credit on the duty paid on such materials. The investigations conducted indicated that the assessee had taken Cenvat credit on fake invoices. When proceedings were initiated, the assessee filed applications for settlement of proceedings and the entire matter was placed before the Settlement Commission. The Settlement Commission held that a sum of Rs. 5,71,47,148-00 is the duty payable and simple interest at 10% on Cenvat credit wrongly availed from the date the duty became payable as per Section 11 AB of the Act till the date of payment. The Revenue calculated the said interest up to the date of the appropriation of the deposited amount and not up to the date of payment. Therefore it was contended that interest has to be calculated from the date of actual utilization and not from the date of availment. Therefore, an application was filed for clarification by the assessee. The said application was rejected upholding the earlier order, i.e., interest is payable from the date of duty becoming payable as per Section 11-AB. Therefore the Apex Court interf....
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....nvat credit amounts to non-taking of credit on the inputs. 21. Interest is compensatory in character, and is imposed on an assessee, who has withheld payment of any tax, as and when it is due and payable. The levy of interest is on the actual amount which is withheld and the extent of delay in paying tax on the due date. If there is no liability to pay tax, there is no liability to pay interest. Section 11 AB of the Act is attracted only on delayed payment of duty i.e., where only duty of exercise has not been levied or paid or has been short levied or short paid or erroneously refunded, the person liable to pay duty, shall in addition to the duty is payable from the date of book entry, showing entitlement of Cenvat credit. Interest cannot be claimed from the date of wrong availment of CENVAT credit and that the interest would be payable from the date CENVAT credit is taken or utilized wrongly. 22. In the instant case the facts are not in dispute. The assessee had availed wrongly the Cenvat credit on capital goods. Before the credit was taken or utilized, the mistake was brought to its notice. The assessee accepted the mistake and immediately reversed the entry. Thus the assessee....