TaxTMI 
TaxTMI 
2017 (10) TMI 445
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....n cenvat credit wrongly, as the said items are not covered within the definition of capital goods or inputs. Therefore, various show cause notices were issued to deny cenvat credit. The Ld. Advocate fairly agreed that as per the decision of the Larger Bench of the Tribunal in the case of BSNL and others vide Interim Order No. 41/2016 date 03.03.2016 as held that cenvat credit on the items in question is not available, therefore, the Ld. Counsel prayed that as duty has been confirmed by invoking extended period of limitation, therefore, the demand pertains to the extended period of limitation is to be set aside and no penalty is imposable on the appellant. To support this contention, he relied on the decision of Mattel Toys (India) Pvt. Ltd. reported in 1992 (58) ELT 218 (Tribunal)., Lanco Industries Ltd. 2011-TIOL-110-CESTAT-Banglore and Accurate Chemicals Ltd. reported in 2014 (310) ELT 441 (Allahabad). She also submits that the present demands are also time barred. To support this contention, he also relied on the decision of BSNL and others vide Interim Order No.142-154/2015 dated 28.07.2015. 3. She further submits that the issue involved in the matter is of interpretation an....
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....dafone Essar South Ltd. reported in 2017-TIOL-2254-CESTAT, Allahabad. We hold that the appellant is not entitled to avail the cenvat credit on the items in question. Issue No. 2 & 3 (Extended period of Limiation & Penalty): We 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 BSNL and others Vide Order 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'ble High Court of Bombay to deny Cenvat Credit. In the said decision the Hon'ble High Court of Bombay itself has clarified that we are not deciding any wider question but restricting our conclusion to the facts and circumstances which was filed for our consideration in these appeals. 7.2. Therefore, as view expressed by the Hon'ble High Court of Bombay, we are required to deal with contention of the ap....
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.... 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 not constitute violation of the Cforms. Consequently, levy of penalty, on the factual parameters apparent on the record of these cases, is unsustainable." 7.4. The said decision was referred before the Hon'ble High Court of Bombay in the case of Bharti Airtel Ltd. (Supra) but Hon'ble High Court has only given the finding that the said decision is in context of Central Sales Ta....
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....ement 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 appellant is a service provider. According to the appellant, his case is squarely covered by the judgment of the Division bench of the Andhra Pradesh High Court in Commissioner of Central Excise, Visakhapatnam-II Vs. Sai Sahmita Storages (P) Limited, 2011 (270) ELT 33 (A.P) = 2011-TIOL-863-HC-AP-CX Rule 2(K) would demonstrate that all the goods used in relation to manu....
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....ttractive 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 deserves to be set aside. 7.9. We, further, find that the decision in the case of Mundra Ports & Special Economic Zones Ltd. (Supra) was not before the Hon'ble High Court of Bombay for consideration in the case of Bharti Airtel Ltd. (Supra). 7.10. In these circumstances, we expressed our opinion that we are not in full agreement of the decision taken by ....
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....x 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, the towers and the cabins are used by the appellant as passive Telecom Infrastructure for providing output service namely Business Auxiliary Service as declared by the appellant to the department in 2005 and agreed to by the department in their reply dt. 20.09.2015. 9. We further find that in this case the intention of the appellant and t....
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....y 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 on the operator' Singhal 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 examine whether on the rules as they stand the appellants would be entitled to the credit of the duty paid on the item in question on the output service namely the cellular service." But what we have to examine within the four corners of law is whether Cenvat Credit would be admissible on input such as steel, structural, racks etc. which become the basis i.e. input goods for providing Business Support Service under Rule 2(k) (....
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....ot 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 Court of Bombay. b) Post 2006, wherever the appellant are paying service tax under the category of Business Auxiliary Services or Business Support Services for providing passive infrastructure, the appellants are entitled to take Cenvat Credit on towers, pre fabricated shelters parts thereon, etc. c) ....
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....me 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 precedent by my ld. Brother also. 17. Having said what is said para 16 above, I would also like to state that the Bombay High Court in the case of Bharti Airtel ltd. discussed the issue in great detail and gave a clear finding in para 32 that "Tow....
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....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 demonstrates the worth emulating modesty displayed by the ld. Justice because even if not expressly so stated, each and every judgment is delivered in view of, and with regard to, the facts and circumstances of the case. I may further a....
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....udgement) 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 are set aside. (C) Penalties imposed on the appellants are set aside. Therefore, the allegation of suppression is not sustainable. Moreover, while reference was made to the Larger Bench by this Tribunal and th....