TaxTMI 
TaxTMI 
TaxTMI 
2022 (10) TMI 581
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....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 issue involved in the present appeal is about the eligibility of the appellant to claim CENVAT credit on tower, tow....
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.... 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 Shri Harshvardhan, learned authorized representative appearing for the Department, however, supported the impugned order and submitted that it does not call for any interference. Learn....
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..... 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 Rules permits a provider of output service to take credit of the excise duties paid on any 'inputs' and 'capital goods'. 13. The first and fundamental issue that needs to be decided in the present appeal is as to whether towers are movable property or immovable property. This is for the reason that if they are immovable property, they would not be excisable goods. 14. Learned counsel for the appellant submitted that towers are not immovable struct....
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....n 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 goods. It was in those peculiar circumstances that the installation and erection of machines at site were held to be by this Court, to be immovable property that ceased to remain movable or marketable as they were at the time of their purchase. Once such a machine is fixed, embedded or assimilated in a permanent structure, the movable character of the machine becomes extinct. The same cannot thereafter be treated as movable so as to be dutiable under the Excise Act. But cases in which ....
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....unal, 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 the appellant that the machine must be treated as a part of the immovable property of the Company. Just because a plant and machinery are fixed in the earth for better functioning, it does not automatically become an immovable property." (emphasis supplied) 19. In Mallur Siddeswara Spinning Mills (P) Ltd. vs CCE, Coimbatore [2004 (166) ELT 154 (SC)], the Supreme Court held that mere bolting of machine to a frame from which it can be unbolted and then shifted would not render the machine to be an immoveabl....
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.... 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 manufacture of the plants in question do not constitute annexation and hence cannot be termed as immovable property for the following reasons : (i) The plants in question are not per se immovable property. (ii) Such plants cannot be said to be "attached to the earth" within the meaning of that expression as defined in Section 3 of the Transfer of Property Act. (iii) The fixing of the plants to a foundation is meant only to give stability to the plant and keep its operation vibration free. (iv) The setting up of the plant itself is not intended to be permanent at a given....
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....at, 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 supplying the service and therefore, would qualify as 'inputs'. There is actual use of the tower and shelters in conjunction with the Antenna and the BTS equipment in providing the output service, which also includes provision of the Business Support Service. The CESTAT has failed to appreciate that the towers and the parts thereon and the prefabricated shelters are inputs, in accordance with the provisions of Rule 2(k) of the Credit Rules. The CESTAT has erred in holding that there is no nexus between the inputs and the output service. The CESTAT also failed to consider the decision of the AP High Court in case of M/s. I....
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.... 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 the placement of various BTS equipment and other items for it to remain in a dust-free, ambient temperature. 47. From the foregoing discussion, clearly towers and shelters support the BTS in effective transmission of the mobile signals and therefore, enhance their efficiency. The towers and shelters plainly act as components/parts and in alternative as accessory to the BTS and would are covered by the definition of "capital goods". 48. In the present cases, the Tribunal, in this Court'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 Indi....