TaxTMI 
TaxTMI 
2022 (10) TMI 581
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....tober, 2005 to March, 2006 3 16.10.2007 April, 2006 to March, 2007 4 13.10.2008 April, 2007 to March, 2008 5 23.09.2009 April, 2008 to March, 2009 6 14.10.2010 April, 2009 to March, 2010 7 13.10.2015 April, 2010 to March, 2014 8 19.04.2016 April, 2014 to March, 2015 9 15.10.2008 April, 2004 to March, 2008 10 12.10.2009 April, 2008 to March, 2009 11 18.10.2010 April, 2009 to March, 2010 12 14.06.2013 April, 2010 to March, 2012 3. The demand of CENVAT credit has been confirmed along with interest under rule 14 of the CENVAT Credit Rules, 2004 [the 2004 Rules] read with section 75 of the Finance Act, 1994 [the Finance Act] and penalties under rule 15 of the 2004 Rules read with sections 76 and 78 of the Finance Act. 4. The appellant is a provider of telecommunication services to customers and business support services to fellow telecommunication service providers. The appellant claims to have discharged service tax liability on such services. As a provider of output services, the appellant availed CENVAT credit on inputs, input services and capital goods under the 2004 Rules. 5. The issu....
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....obile Services Limited v. CST, Delhi [2018-TIOL-2409-HC-DEL-ST]. Reliance has been placed on a Larger Bench decision of the Tribunal in CCE, Chandigarh vs Kashmir Conductors [1997 (96) ELT 257 (Tri-LB)] to support the view that the decision of the jurisdictional High Court is binding on all Tribunals under its superintendence; (viii) Confirmation of demand in the impugned order pertaining to show cause notices dated 07.04.2006, 15.10.2008, 12.10.2009, 18.10.2010 and 14.06.2013 is illegal, for being beyond show cause notices for the reason that the confirmation of demand is based on the finding that the subject items do not qualify as inputs/capital goods for the appellant. Such allegations were not made in these show cause notices dated 07.04.2006, 15.10.2008, 12.10.2009, 18.10.2010 and 14.06.2013 and the whole demand is based on the allegation that the subject items are not received in the registered premises of the appellant; (ix) The extended period of limitation could not have been invoked in the facts and circumstances of the case; and (x) No interest is payable and no penalties are imposable. 7. Shri Ajay Jain, learned special counsel assisted by....
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....and fixtures; (v) refractories and refractory materials; (vi) tubes and pipes and fittings thereof; (vii) storage tank, and (viii) motor vehicles other than those falling under tariff headings 8702, 8703, 8704, 8711 and their chassis but including dumpers and tippers. used - (1) in the factory of the manufacturer of the final products,; or (1A) xxxxxxxxxxx (2) for providing output service; (B) xxxxxxxxxxxxx (C) xxxxxxxxxxxxx (D) xxxxxxxxxxxxx" 11. 'Input' has been defined in rule 2(k) and the relevant portion is as follows: "2(k) "input" means - (i) all goods used in the factory by the manufacturer of the final product; or (ii) xxxxxxxxx (iii) xxxxxxxxx (iv) all goods used for providing any output service, or; (v) xxxxxxxxx but excludes - (A) xxxxxxxxxx (B) xxxxxxxxxx (C) xxxxxxxxxx (D) xxxxxxxxxx (E) xxxxxxxxxx (F) any goods which have no relationship whatsoever with the manufacture of a final product. Explanation. - xxxxxxxxxx" 12. Rule 3(1) of the 2004....
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....xamined at length by the Supreme Court in Commissioner of Central Excise, Ahmedabad vs. Solid & Correct Engineering Works [2010 (252) E.L.T. 481 (S.C.)]. In this case the Supreme Court drew a distinction between machines which by their very nature are intended to be fixed permanently to the structures embedded in the earth and those machines which are fixed by nuts and bolts to a foundation not because the intention was to permanently attach it to the earth but because foundation was necessary to provide a wobble free operation to the machine. The relevant portion of the judgment is reproduced below: "33. It is noteworthy that in none of the cases relied upon by the assessee referred to above was there any element of installation of the machine for a given period of time as is the position in the instant case. The machines in question were by their very nature intended to be fixed permanently to the structures which were embedded in the earth. The structures were also custom made for the fixing of such machines without which the same could not become functional. The machines thus becoming a part and parcel of the structures in which they were fitted were no longer movable ....
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....the facts and circumstances of each case." (emphasis supplied) 18. It would also be relevant to refer to the decision of the Supreme Court in Sirpur Paper Mills Ltd. vs. Collector of Central Excise, Hyderabad [1998 (97) E.L.T. 3 (S.C.)] wherein the Supreme Court observed that merely because a machine is attached to earth for more efficient working and operations it would not per se become immovable property. The observations are as follows: "5. Apart from this finding of fact made by the Tribunal, the point advanced on behalf of the appellant, that whatever is embedded in earth must be treated as immovable property is basically not sound. For example, a factory owner or a householder may purchase a water pump and fix it on a cement base for operational efficiency and also for security. That will not make the water pump an item of immovable property. Some of the components of the water pump may even be assembled on site. That too will not make any difference to the principle. The test is whether the paper-making machine can be sold in the market. The Tribunal has found as a fact that it can be sold. In view of that finding, we are unable to uphold the contention of th....
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....ve factors and cannot be confined or pigeonholed to one single test. In the present case, the entire tower and shelter is fabricated in the factories of the respective manufacturers and these are supplied in CKD condition. They are merely fastened to the civil foundation to make it wobble free and ensure stability. They can be unbolted and reassembled without any damage in a new location. The detailed affidavit filed by the assessees demonstrate that installation or assembly of towers and shelters is based on a rudimentary "screwdriver" technology. They can be bolted and unbolted, assembled and re-assembled, located and re-located without any damage and the fastening to the earth is only to provide stability and make them wobble and vibration free; devoid of intent to annex it to the earth permanently for the beneficial enjoyment of the land of the owner. The assessees have also placed on record the copies of the leave and license agreements, making it clear that the licensee has the right to add or remove the aforesaid appliances, apparatus, equipment etc. 37. On an application of the above tests to the cases at hand, this Court sees no difficulty in holding that the manu....
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....oods used for providing output services, except those which are specifically excluded in the said Rule. Therefore, the definition is wide enough to bring all goods which are used for providing any output service. Further, from the decisions of the Supreme Court and other judgments referred to previously, the test applicable for determining whether inputs are used in the manufacture of goods is the 'functional utility' test. If an item is required for providing out the output services of the service provider on a commercial scale, it satisfies the functional utility test. In the facts of the present case, what emerges is that, BTS is an integrated system and each of its components have to work in tandem with each other in order to provide the required connectivity for cellular phone users and for efficient telecommunication services. The towers and pre-fabricated shelters form an essential in the provision of telecommunication service. The CESTAT - in the opinion of this Court - failed to appreciate that it is well settled that the word "used" should be understood in a wide sense, so as to include passive as well as active use. The towers in CKD condition are used for the purpose of....
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....46. On the basis of the above analysis, it is apparent that the primary test to qualify as an accessory is whether does the item in question adds to the beauty, convenience or effectiveness of something else. An accessory is an article or device that adds to the convenience or effectiveness of but is not essential to the main machinery. It was highlighted during the hearing of the appeals that the towers are structures installed to support GSM and microwave antennae. These antennae receive and transmit signals and are used for providing output service. Without them, the antennae cannot be installed high above the ground and cannot receive or transmit signals. Therefore, the towers too have to be considered as essential component/part of the capital goods, namely BST and antennae. Further, BTS is an integrated system and each component in the BTS, have to work in tandem to provide cellular connectivity to phone users and to provide efficient services. In the facts of the present case, it is evident that the towers form part of the active infrastructure as the antennae cannot be placed at that altitude to generate uninterrupted frequency. Further, these shelters are accessories for t....