TaxTMI 
TaxTMI 
2018 (1) TMI 1218
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....h of 14 appeals are involving similar disputes dealing with cenvat credit on inputs / capital goods and input services availed by these appellants, who are all involved in telecommunication business. The appellants are registered with the department for discharging service tax under telecommunication services. 2. The first dispute in these appeals is with reference to cenvat credit availed by them in respect of structural items like MS angles etc. and also various capital goods which are all used for setting up of telecommunication towers in various places. Appellant claimed credit on all these items under the category of "inputs" or "capital goods" dependent on the nature of such goods. The lower authority denied the credit stating that....
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....m operators and telecommunication towers are essential infrastructure for them to provide such services. Creation of such tower by paying service tax on such erection is an essential input service activity. Relying on the statutory definition of Rule 2(l) of Cenvat Credit Rules, 2004, he submitted that the appellants are eligible for such input service credit under the main part of the definition without any reference of any other provision for support. In other words, it is the claim of the appellant that input services in the present case being a service used by a service provider for providing a taxable service is covered under Rule 2(l) (i) during the relevant time, without drawing support from inclusive part of the definition which inc....
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.... erection of towers was subject matter of substantial litigation. This can be inferred even from the decision of the Tribunal which finally got resolved by the conflicting decisions of Larger Bench in Tower Vision India Pvt. Ltd. (supra). The basis that immovable property / asset is created and thereby the cenvat credit scheme will not apply itself is a subject matter of dispute not only in telecom service but with reference to other taxable services also. Accordingly, he pleaded that even if the denial of credits were upheld based on the ratio laid down by the decision of the Larger Bench of the Tribunal as well as Bombay High Court, no penalty can be imposed on the ground of bonafides. He relied on decision of the Tribunal in Vodafone Mob....
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....a as the Hon'ble Bombay High Court in Bharti Airtel Ltd. (supra) as well as Larger Bench decision in Tower Vision India Pvt. Ltd. (supra) held that credit on such inputs / capital goods as claimed by the appellant are not available. Following the ratio of these decisions, we hold that appellants are not eligible for such credits. 12. On the second issue regarding eligibility of various credits on input services, we note that the main activity of which substantial credit has been availed by various appellants is with reference to erection and construction of telecommunication towers. The plea of the appellant is that these towers are basic essential requirements for telecommunication service. As such, the service of erecting of such tower....
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....me issue was agitated before the Bench. Tribunal considering the issue from all angles held that CENVAT credit can be availed of service tax paid on services utilized for erection of towers. We do not find any reason to deviate from such a reasoned order. Accordingly, we hold that CENVAT credit availed of service tax paid on services utilized for erection of tower....." 13. The said ratio has been followed in BSNL Vs CCE Chandigarh - 2017 (47) STR 246 (Tri.-Chan.). Accordingly, following the ratio already laid down, we hold that input service credit on erection of telecommunication towers are eligible for the appellant. 14. Regarding various other input services like Rent-a-cab, Outdoor catering, Air Travel Agent, tour operator, we no....
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.... Finally, the matter was decided in Tower Vision case (supra) which followed the ratio of the Hon'ble Bombay High Curtin the case of Bharti Airtel (supra). Admittedly, the dispute is one involving legal interpretation and difference of opinion. In such circumstances, it is not tenable to invoke ingredients of Section 73 proviso for confirming the demand for extended period as well as imposing penalties. In this connection, we refer to the decision of the Tribunal in Vodafone Mobile Services Ltd. 2017-TIOL-1904-CESTAT-HYD. While upholding the denial of credit on MS angles and beams in identical dispute, the Tribunal held that as below : "6. However on the matter of penalty we find that the issue is interpretational in nature. Concer....