TaxTMI 
TaxTMI 
2021 (4) TMI 306
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....credit is not available. A SCN dated 6.07.2009 seeking to deny the erroneous credit amounting to Rs. 7,89,56,288/- and to impose penalty under Section 78 of the Finance Act and Rule 15(1) of the CCR, 2004. The same was confirmed by Order-in-Original No. 03/2010 (ST) dated 17.02.2010 which is subject of discussion in the appeal. 2. The Learned Counsel for the appellants submits that the towers and pre-fabricated buildings on which CENVAT credit has been availed are capital goods and therefore, CENVAT credit is correctly availed as: • The towers/ tower materials and pre-fabricated shelters which are integral to the erection of the cell sites for providing cellular coverage in public areas are capital goods used in providing the output service for the Appellants. • A cell site of a cellular operator consists of antennae which receive and transmit signals so as to facilitate the Telecommunication service of the Appellants. These antennae are mounted on the tower and a typical tower would have more than four or five antennae to receive the signal and transmit the signal. • Therefore, tower/tower materials and pre-fabricated shelters would fall u....
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....s considered the decision in Bharti Airtel Limited v. CCE, Pune-III - 2014 (35) S.T.R. 865 (Bom.) and distinguished the same on the ground that the said decision proceeded on the wrong presumption that the goods in question are immovable properties and accordingly the "permanency test" as llaid down by the Supreme Court in Solid and Correct Engineering (2010-TIOL-25-SC-CX) was not applied by the Hon'ble Bombay High Court • Relying on the ratio of the decision of the Hon'ble Delhi High Court in Vodafone Mobile Services Ltd and Others 2019 (27) G.S.T.L. 481 (Del.), the Hon'ble Chandigarh Tribunal in the case of CCE Gurgaon v. Bharti Infratel Ltd Final Order No. 60267-60269/2019 dated 21.02.2019 passed by Hon'ble CESTAT Chandigarh and BharatiInfratel Ltd v. Commissioner of Service Tax, Delhi Final Order No. 60592-60594/2019 dated 22.05.2019 passed by Hon'ble CESTAT Chandigarh has allowed the credit on angles, beams, channels and prefabricated structures/shelters. • Accordingly, the decision of the Hon'ble Delhi High Court followed by the Hon'ble Chandigarh Tribunal will be squarely applicable in the present appeal and therefore the appeal is to be allowed on ....
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.... STR 422 (Bom.) has decided that the credit in question is not available to the appellants. 4. We have gone through the records of the case and the submissions of the appellants as well as the Department. The main case of the Department is that the angles, channels, beams, pre-fabricated buildings/shelters etc used for erecting transmission towersare not directly used for providing the output service though the same are used indirectly; the definition of input cannot be given an enlarged connotation in absence of the words 'directly or indirectly' and 'in or in relation to'; the transmission towers are admittedly attached to earth. Erection of towers attaching to earth does not amount to manufacture of goods and therefore the erected towers cannot be called as capital goods; merely for the sake of availing Cenvat credit of duty paid on the material used in erecting towers, the Appellant cannot classify the towers under Chapter 85 of the Central Excise Tariff and claim that the angles, channels and beams are component and accessories of capital goods; extended period of limitation can be invoked as the Appellant has not declared the details of items on which credit has been taken....
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....al equipment, generator sets, feeder cables etc. and that these systems are to be treated as "composite system" classified under Chapter 85.25 of the Tariff Act and be treated as 'capital goods' and credit be allowed, also is not acceptable. It is clear that each of the component had independent functions and hence, they cannot be treated and classified as single unit. It is clear that all capital goods are not eligible for credit and only those relatable to the output services would be eligible for credit. The goods in question in any case cannot be held to be capital goods for the purpose of Cenvat credit as they are neither components, spares and accessories of goods falling under any of the chapters or headings of the Central Excise Tariff Schedule as specified in sub-clause (i) of the definition of capital goods. Hence a combined reading of sub-clauses (a)(A) (i) and (iii) and sub-rule (2) indicates that only the category of goods in Rule 2(a)(A) falling under clause (i) and (iii) used for providing output services can only qualify as capital goods and none other. Admittedly the goods in question namely the tower and part thereof, the PFB and the printers do not fall within th....
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....the tower should be treated as parts and components of the antenna. It is urged that antennas fall under Chapter 85 of the Schedule to the Central Excise Tariff Act and hence being capital goods used for providing cellular service falling under Rule 2(a)(A)(iii) as part of capital goods falling under Rule 2(a)(A)(i) towers become accessories of antenna and should be held as capital goods for availing of credit of duty paid. The argument at the first blush appeared to be attractive however a deeper scrutiny shows that the same is without substance. It would be misconceived and absurd to accept that tower is a part of antenna. An accessory or a part of any goods would necessarily mean such accessory or part which would be utilized to make the goods a finished product or such articles which would go into the composition of another article. The towers are structures fastened to the earth on which the antennas are installed and hence cannot be considered to be an accessory or part of the antenna. The position in this regard stands fortified from the decision of the Supreme Court in the case of "Saraswati Sugar Mills v. CCE, Delhi [2011 (270) E.L.T. 465]". From the definition of the term....
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....ourt's view erred in interpreting the definition of "capital goods". It merely adopted the ratio laid down by the Bombay High Court in the case of the Bharti Airtel (supra) and Vodafone India (supra). Both those are subject matter of appeals before the Supreme Court. This Court is of the opinion, with due respect to the Bombay High Court that those two judgments are contrary to settled judicial precedents, including the later view of the Supreme Court in Solid and Correct Engineering (supra). In this conclusion, it is held that the Tribunal clearly erred in concluding that the towers and parts thereof and the prefabricated shelters are not capital goods with the meaning of Rule 2(a) of the Credit Rules. This question is answered in favour of the assessee and against the Revenue. 49. The allied question is alternatively, whether towers and shelters would qualify as "inputs" under Rule 2(k) of the Credit Rules. The assessees had urged that the tower (and parts thereof) and the pre-fabricated shelters would also qualify as 'inputs' used for providing output service. This contention is based on sub-clause (ii) of clause (k) of Rule 2 (definition of "input") of the Credit Rules....
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....therefore, not be excisable goods. (vi) if any goods installed at site (example paper making machine) are capable of being sold or shifted as such after removal from the base and without dismantling into its components/parts, the goods would be considered to be movable and thus excisable. The mere fact that the goods, though being capable of being sold or shifted without dismantling, are actually dismantled into their components/parts for ease of transportation etc., they will not cease to be dutiable merely because they are transported in dismantled condition. Rule 2(a) of the Rules for the Interpretation of Central Excise Tariff will be attracted as guiding factor is capability of being marketed in the original form and not whether it is actually dismantled or not, into is components. Each case will therefore have to be to decided keeping in view the facts and circumstances, particularly whether it is practically possible (considering the size and nature of the goods, capability of goods to move on self-propulsion - ships etc.) to remove and sell the goods as they are, without dismantling into their components. If the goods are incapable of being sold, shifted and market....
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.... steel were not included in Explanation 2 from 2004 upto March, 2006. The Cenvat Credit Rules, 2004 were amended in exercise 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 manufacturer and would not apply to the service provider. According to him, either before the amendment made in the year 2009 or thereafter, the appellant was neither factory nor manufacturer and he has only constructed jetty by use of cement and steel for which he was entitled 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 v. Sai Sahmita Storages (P) Limited, 2011 (270) E.L.T. 33 (A.P.) wherein in paragraph 7, it has been clearly held that a plain reading of the definition of Rule 2(k) wo....
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....nt though attractive cannot be accepted. The jetty is constructed by the appellant by purchasing iron, cement, grid etc. which are used in construction of jetty. The contractor has constructed jetty. There are two methods, one is that the appellant would have given entire contract to the contractor 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 contractor 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 opinion, the appellant was entitled for input credit and it cannot be 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.'' ----- 72. In the present case, it is not in dispute that the appellant is a taxable service provider providing passive telecommunication service. Therefore, the assessee is entitled for input credit on the weight of judicial authority discussed above. It is also clear that several High Courts in differe....
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....inion that we are bound by the judgement of the larger Bench. This very Bench relying on the larger Bench decision in the above case, decided in favour of Revenue, in the case of Vodafone Essar South Ltd. 2020 (43) G.S.T.L. 249 (Tri. - Bang.), decided the issue in favour of Revenue. This Bench observed that After considering the submissions of both the parties and perusal of the material on record and the various decisions relied upon by the appellant, we find that various Benches of the Tribunal have held that the appellants are not entitled to take Cenvat credit on tower/tower materials and prefabricated buildings/shelters as capital goods as well as inputs. We also find that this issue has been subject matter of litigation before various Benches of the Tribunal and the matter was also referred to the Larger Bench and finally the Larger Bench in the case of Tower Vision (India) Pvt. Ltd. cited supra answered the reference in favour of the Revenue vide its order dated 16-3-2015 disposing of various appeals including the appeal of the appellant. The Tribunal in the said decision has also followed the decision of the Karnataka High Court in the case of CCE, Bangalore v. ....
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....terpretation of complex legal provisions. Learned Commissioner finds that the appellants have not declared the details of items on which the credit has been availed; have only declared the amount of credit taken; therefore it cannot be said that the Department was in the knowledge of availment of credit on such materials; the assessee not only continued to avail the CENVAT credit but continue to utilize the same with an intent to evade payment of service tax. 10. We find that in the instant case, demand pertains to period 10.9.2004 to 30.09.2006. Show cause Notice has been issued on 06.07.2009, which is clearly beyond the period of limitation. We find that Hon'ble Apex Court in the case of Pushpam Pharmaceuticals Vs CCE 1995(78) ELT 401(SC) has held that mere suppression of facts is not sufficient to invoke extended period; there should be some positive Act on the part of the noticee to evade payment of duty. We find that other than just mentioning that the assessee continued to avail and utilise credit, no evidence of any positive act by the appellant has been brought out. Also in the case of Continental foundation Joint Venture Vs CCE, Chandigarh 2007(216) ELT 177(SC), Apex....