TaxTMI 
TaxTMI 
2016 (9) TMI 1136
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....ssued demanding the tax; and dispute relates to following issues:- Sr. No. Issue Cenvat Credit Period of Dispute disallowed Rs. 1 2 3 4 1 Utilisation of Cenvat Credit in excess of 1 20% 2004-05 to December-2007 1,270,986 2 Cenvat on services utilized in construction of towers 2003-04 to December 2007 1,451,093 3 Availment of Cenvat Credit on Capital goods in excess of 50 in the same FY 2006-07 7,296,832 4 Cenvat Credit on input service related to supply of diesel 2006-07 to December 2007 598,610 5 Cenvat credit on liasoning charges 2004-05 to December 2007 993,976 6 Cenvat credit on catering charges Cenvat Credit on towers and shelters 2006-07 to December 2007 443,443 7 2007 to December 2007 4,643,553 - 8 Total credit disallowed 26,698,493 3. The show-cause notice was contested by appellant on merits and also on limitation. The adjudicating authority after following due process of law confirmed the entire demand with interest and also imported equivalent penalty and a penalty under Section 77 of Finance Act, 1994. 4. Learned Chartered Accountant appearing for the appellant submits as under:- (a) Utilization of cenvat....
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.... subsequent to 01.04.2011. Accordingly, the credit of input services falling under the category of construction and works contract was not allowed in view of the specific exclusion provided under the definition of input services. The credit of other services namely erection, commissioning and installation, consulting engineer services, business auxiliary service, business support services were allowed. In the present case, the period of dispute is prior to 1st April, 2011 i.e. 2003-04 to Dec-07. Thus credit of all the services used in setting up of the tower is eligible as there was no restriction clause provided in definition of input service during the period of dispute. (ii) Further, the credit on services used in construction of unit which results into the immovable property has been consistently allowed by the Hon'ble High Court and Tribunal in the following cases: Sr. No. Particulars 1 Sai Shamita Storages (P) Ltd. [2011 (23) STR 341 (AP) 7,8,9] 2 Mundra Ports & Special Economic Zone Ltd [2015-TIOL-HC-AHM-ST] 3 Bellsonica Auto Components India P Ltd [2015 (7) TMI 930] 4 Cadila Healthcare Ltd[2013 (30) STR 3 (Guj.)] 5 Navratna S.G Highway Prop. Pvt. Lt....
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....e is no restriction the Cenvat Credit Rules that the credit of entire duty paid on capital goods cannot be availed in subsequent years. In the present case, the appellant availed the credit of 100% of the duty paid on capital goods in the financial year subsequent to the financial year in which the capital goods were received. Thus, the credit is rightly availed by the appellant. The appellant also relies upon the following judgments: HERBICURE PVT. LTD., KOLKATA 2007 (216) E.L.T. 216 (Tri. - Kolkata) KEIHIN FIE PVT. LTD. 2007 (213) E.L.T. 637 (Tri. - Mumbai) Without prejudice of the above submission, in any case the demand of credit for 50% of the duty paid on the capital goods cannot be demanded as said credit will be eligible in subsequent year. Therefore, demand of credit is not sustainable. (d) The credit on input services related to supply of diesel: (i) The appellants are engaged in providing telecommunication services. The towers are required to be erected at various places. The running of the tower with the equipments such as MSC, BSC, BTS, etc. requires uninterrupted supply of electricity. The appellant keeps stand-by generator and diesel to ensure that in case....
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....mbai arising out of Appeal No. ST/87803/14 filed by Idea Cellular Ltd. Further, it is consistently held that the credit of catering service is available. The appellant also relies upon the judgement in case of M/s Ultra Tech Cement as reported in 2010 (260) E.L.T. 369 (Bom.). Therefore, the credit of the same is rightly availed by the appellant. (g) Cenvat credit on tower & shelter: (i) The appellant has correctly availed the credit of the of the above items as they are inputs as well as capital goods and are used for providing output services. Accordingly, the credit is rightly availed by the appellant. (ii) Without prejudice to the above submission, the issue regarding eligibility of credit on towers & shelters was decided by the Larger Bench in the case of M/s Idea Mobile Communication Ltd, M/s Idea Cellular Ltd, & others Versus Commissioner of Central Excise (Adj) / Commissioner of Service Tax 2016 (3) TMI 165 CESTAT NEW DELHI (LB). as reported in [2016 (3) TMI 165]. Thus it will be evident that the matter was finally decided by the Larger Bench. The reference of the Larger Bench itself substantiates that there was divergent view regarding eligibility of credit on tow....
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....ue involved in the case is the eligibility to avail CENVAT credit of service tax paid on various input services and utilization thereof. Adjudicating authority has held that appellant is not eligible to avail CENVAT credit on services utilized for construction of towers, service related to supply of diesel, liasoning services, catering charges, towers and shelters and on the capital goods. He has also held that appellant has wrongly utilized excess CENVAT credit of more than 20% of credit balance in few months despite rendering taxable non-taxable services. In our considered view the adjudicating authority has erred in coming to such a conclusion we address each issue as under:- (a) Demand pertaining to utilization of CENVAT credit in excess of 20% As per the provisions of Rule 6(3)) of Cenvat Credit Rules, 2004, cenvat credit cannot be utilized in excess of 20% of the credit, if an assessee is providing taxable and non-taxable services. Learned Counsel was correct in submitting that similar issue in respect of appellant is decided by this Bench as reported at 2009 (16) STR 714. Since similar issue in appellant s own case is decided in their favour following the same, we hold tha....