AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (9) TMI 157
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.... in his favour . (1) CCE, Delhi-III vs. Bellsonica Auto Components India P.Ltd.-2015 (40) STR 41 (P&H) (2) General Manger, Consumer Mobility, BSNL Ltd. vs. CCE, Chandigarh-2014-VIL-325-CESTAT-DEL-ST (3) M/s. Spice Communication Ltd. vs. CCE, Bangalore-2017-VIL-331-CESTAT-BLR-Central Excise. 4. He stated that no provision has been invoked for recovery and no specific provision was mentioned. He submits that the extended period of limitation was not applicable and equivalent penalty cannot be imposed. 5. Learned AR reiterated the findings of the Commissioner (Appeals) in the impugned order and submits that the case is covered by the decision of the Hon'ble Bombay High Court in the case of Bharti Airtel Ltd. vs. CCE, Pune-III-2014 (35) STR 865 Bom.) which has not been stayed by any higher judicial forum. He also relied on the case law in the case of Vodafone India Limited vs. CCE, Mumbai-II-2015 (324) ELT 434 (Bom.). 6. Heard both sides and examined the record. 7. I find that issue of Cenvat credit on prefabricated, buildings/shelters for telecommunication services is no longer res integra. 8. As the Larger Bench of this Tribunal in the case of Tower Vision Ind....
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.... case of General Manager, Consumer Mobility, BSNL Ltd. vs. CCE, Chandigarh (supra) and M/s.Spice Communication Ltd. (supra). Since these judgments are of Single Member, decision of the Larger Bench of this Tribunal and the judgment of Hon'ble Bombay High Court relied upon by Ld.AR would prevail on these decisions. It was also argued that the show cause notice does not mention the provisions for recovery. However, I find that both the show cause notices have mentioned the correct provisions of recovery under Cenvat Credit Rules, 2004. 10. On the question of extended period and penalty, I find that the issue of availability of cenvat credit on the above said items was in dispute and the matter has been referred to the Larger bench of this Tribunal in the case of Tower Vision India Pvt.Ltd. and others Vide Order No.IO/ST/142-154/2015-CU (DB) dated 28.07.2015, wherein this Tribunal observed as under: 7. The issue before us is to decide is that whether the appellants are entitled to take Cenvat Credit on towers, pre fabricated shelters and accessories thereof being provider of output services or not 7.1 The Revenue is relying on the decision of Bharti Airtel Ltd. (Supra) of Hon....
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....ders is exigible to tax under the 2005 Act. The case of the Revenue is that there was a misuse of C forms and that the incorporation and use for provision of the passive telecommunication infrastructure (of goods procured through inter-state transactions) are not comprehended within the expression telecommunications networks in Section 8(3) of the CST Act." 22. And finally held as under: "In the facts and circumstances of this lis, in view of the rations deducible from the judgments of the Supreme Court in Rajasthan Electricity Board and in J.K. Cotton Spg. & Wvg. Mills Co. Ltd. we are of the considered view that the purchase of goods by the petitioners from outside the State, comprising goods specified in the certificates of Registration under the CST Act granted to them, against issue of C forms and where the goods have been employed in erection and maintenance of cell phone towers which are integral to Telecommunication Network, fall within the ambit of Section 8(1) read with Section 8(3)(b) of the CST Act and are entitled to be taxed accordingly. The fact that the goods purchased by the petitioners were neither sold nor used in the manufacture of goods for re-sale does no....
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.... the appellant is a factory or manufacturer or service provider in view of that fact that it is not disputed by mr. Y.N. Ravani, learned counsel appearing for the Revenue in this Tax Appeal that the appellant providers service on port for which he is getting jetty constructed through the contrator and the appellant has claimed input credit on cement and steel. The cement and steel were not included in Explanation 2 from 2004 upto march, 2006. The Cenvat Credit Rules, 2004 were amended in excercise of the powers conferred by Section 37 of the Central Excise Act, 1944 with effect from 7.7.2009, the date on which it was notified by the Central Government from the date of the notification. According to learned counsel for the appellant, this amended definition would apply only to the factory or manfuacturer and would not apply to the serivce provider. According to him, either before the amendment made in the year 2009 or thereafter, the appellant was neither factory nor manfuacturer and he has only constructed jetty by use of cement and steel for which he was entiteld for input credit as jetty was constructed by the contractor, but the jetty is situated within the port area and the app....
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....-SC-CX would not be applicable to the facts of the instant case. 9. Mr. Ravani has also vehemently urged that since jetty was constructed by the appellant through the contractor and construction of jetty is exempted and, thereofre, input credit would not be available to the appellant as construction of jetty is exemtped serivce. The argument though attractive canno tbe acdpeted. The jetty is constructed by the appellant by purchasing iron, cement, grid etc. which are used in construction of jetty. The contractor has contruected jetty. There are two methods, one is that the appellant would have given entire contract to the contracotr for making jetty by giving material on his end and then make the payment, the other method was that the appellant would have provided material to the cotractor and labour contract would have been given. The appellant claims that he has provided cement, steel etc. for which he was entitled for input credit and, therefore, in our opoinion, the appellant was entitled for input credit and it cannotbe treated that since construction of jetty was exempted, the appellant would not be entitled for input credit. The view taken contrary by the Tribunal deserve....
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....viding 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. Furhter, we find that the adjudicating authority has heavily relied upon the decision of Bharti Airtel ltd. (Supra); in the said case the facts are totally different to the facts of the case in hand. In fact, in that case appellant was engaged in providing cellular telephone service and as per Board Circular No. 137/315/2007-CX-4 dt. 26.02.2008, it is clarified that no cenvat credit on towers and BTS cabin is permissible for cellular phone service provider. In that instant case....
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....munication Service. In fact, Cenvat credit on antennas is not claimed at all. The appellant is only providing Business Support Service in the form of Passive Telecom Infrastructure . This Passive Telecom Infrastructure enables all Telecom Operators to install their Antennas. The intention of the appellant is to give the Operators the opportunity to install active infra network equipment including GSM Antennas and BTS equipment, and to extend highly specialized technical service, which includes the provision of creation and maintenance of highly controlled artificial temperatures and humidity levels at all times as well as continuous power supply at the prescribed voltage, so as to operate the equipment of the operators, and thus be conducive to the functioning of the operators signal transmission for their ultimate consumers. Whereas the Hon'ble High Court, in the case of Bharti Airtel Ltd., was examining a different output service. Before coming to its conclusion the High Court, in para 31, defined the point it would examining as follows : "In the light of the aforesaid discussion we examine whether on the rules as they stand the appellants would be entitled to the credit of th....
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....Credit on these items. Therefore we hold that extended period of limitation is not invokable. Accordingly, the demand pertains to extended period of limitation are set aside. 10. On merits, we find that the facts of the cases in hand are similar to the fats of the cases of Bharti Airtel Ltd. (Supra), although we are not in agreement to the same but and we are bound by the decision of the Hon'ble High Court and the same is to be followed as judicial discipline. Therefore, on merits, we hold that appellant are not entitled to take Cenvat Credit on towers, portable shelters and accessories thereon in the light of decisions of Bharti Airtel Ltd. (Supra) of the Hon'ble High Court of Bombay. 11. With regard to penalties, as we observed that the allegation of suppression of facts for availing inadmissible Cenvat Credit with malafide intention is not sustainable in the light of the divergent views of the various judicial pronouncements, the penalties on the appellants are not imposable. 12. In view of the above observation the following order has been passed: a) On merits, the appellants have no case in the light of the decision of Bharti Airtel Ltd (Supra) of Hon'ble High Cour....
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.... "10. On merits, we find that the facts of the cases in hand are similar to the facts of the cases of Bharti Airtel ltd. (Supra), although we are not in agreement to the same but and we are bound by the decision of the Hon'ble High court and the same is to be followed as judicial discipline. Therefore, on merits, we hold that appellant are not entitled to take cenvat credit on towers, portable shelters and accessories theroen in the light of the decisions of Bharti Airtel ltd. (Supra) of the Hon'ble Court of Bombay." Thus having held that on merits the appellants are not entitled to take cenvat credit on towers, pre-fabricated building (PFB) and parts thereof in the light of the decision of Bombay High Court in the case of Bharti Airtel (supra), I am not able to persuade myself to reconcile with the order contained in para 12(b) and 12(c) quoted above because the contents thereof are inconsistent, and in disharmony, with the clear, unconditional and unqualified finding and order recorded in para 10 & 12(a) quoted above that the appellants have no case on merits in the light of Bombay High Court judgement in the case of Bharti Airtel (Supra) which is held to be a binding prece....
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....red to the Judgment s of CESTAT in the cases of GTC Infrastructure (Supra) and M/s Reliance Infratel ltd. (Supra). While the judgment in the case of GTL Infrastructure ltd. was passed before the judgment of Bombay High Court in the case of Bharti Airtel, I find that in the case of Reliance Infratel, the Judgment of Bharti Airtel has been distinguished essentially on the ground that in that case the output service was telecom service while in the case of Reliance Infratel, the output service is Business Support Service (Support Service for Business or Commerce). I am of the view that this distinction is of no consequence vis-a-vis the analysis, reasoning and ratio following which the Bombay High Court formed the view that towers, being immovable property, cannot be goods. In the Judgment of Reliance Infratel, CESTAT has also made a reference to the following observation of the Bombay High Court in para 33 of the Judgment in the case of Bharti Airtel. "we clearly that we are not directing any under question but restricting our conclusion to the facts and circumstances which have fell for our consideration in these appeals." What is expressly stated in the said quotation only de....
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....he said Bombay High Court judgement, more so when immovability thereof has been taken as a ground by Bombay High Court for disallowing the credit on PFB as is also evident from the fact that it cited (in para 29 of the Bharti Airtel Judgement) the judgement in the case of CCE, Mumbai-IV Vs. Hutchison Max Telecom- 2008 (224) ELT 191 (Bom.) (Specially quoting para 7,8 and 9 thereof) 21. In the light of the foregoing, I hold that in view of the reason/ratio and finding of the Bombay High Court in the case of Bharti Airtel (Supra), Cenvat credit in respect of telecom tower, PFB and parts thereof is not available even in those cases where such credit is allowed by my ld. Brother vide para 12 (b) and (c) of his Judgment. Consequently, I express my respectful disagreement with the order of my ld. Brother as contained in para 12(b) and 12 (c) of his judgment and pass the following order in total agreement with the rest of his order. (a) On merits, the appellants have no case in the light of the decision of Bharti Airtel Ltd. (Supra) of Hon'ble High Court of Bombay. (b) The extended period of limitation is not invokable. Therefore, the demands beyond the normal period of limitation....