2023 (2) TMI 895

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....t entered into 'Passive Infrastructure Sharing Agreement' with various telecom operators for setting up towers, shelter, diesel generator sets, air conditioner and electrical works, DC power plant, Battery Bank etc. and leasing of the same to these telecom operators. The appellant also provided operation and maintenance services with respect to infrastructure assets to the telecom operators. The appellant availed CENVAT credit of excise duty paid in respect of capital goods and inputs used in setting up such passive infrastructure. 3. During investigation, it was observed that the appellant had availed ineligible CENVAT credit. Accordingly, the following four show cause notices were issued to the appellant, seeking to deny CENVAT credit availed and utilised by the appellant in respect of inputs and capital goods used in providing output services. S. No. Show Cause Notice Period 1 28.8.2012 2011-12 2 26.6.2013 2012-13 3 20.4.2015 2013-14 4 12.4.2016 2014-15 4. The above four said show cause notices were adjudicated upon by the Commissioner of Service Tax, Delhi [the Commissioner] by order dated 28.9.2016. The demand of CENV....

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....oundation stubs/anchor bolts and joined with bracing members to form the structure. The tower is formed by connecting all the L-angled metal pieces, which are tightened with nuts and bolts. These nuts and bolts can be unfastened and the dismantled tower can be transported to and reassembled at another location. The attachment of tower with the help of nuts and bolts to a foundation to provide stability and functionality does not qualify as 'attached to the earth'. 12. The expression 'movable property' has been defined in section 3(36) of the General Clauses Act, 1897 to mean property of every description, except immovable property. Section 3 of the Transfer of Property Act, 1882, provides that unless there is something repugnant in the subject or context, 'immovable property' would not include standing timber, growing crops or grass. Section 3(26) of the General Clauses Act, 1897, provides that 'immovable property' shall include land, benefits to arise out of land, and things attached to the earth, or permanently fastened to anything attached to the earth. The term 'attached to the earth' has not been defined in the General Clauses Act, 1897 but section 3 of the Transfer of....

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....ide a wobble free operation to the machine. An attachment of this kind without the necessary intent of making the same permanent cannot, in our opinion, constitute permanent fixing, embedding or attachment in the sense that would make the machine a part and parcel of the earth permanently. In that view of the matter we see no difficulty in holding that the plants in question were not immovable property so as to be immune from the levy of excise duty." (emphasis supplied) 14. Earlier, the Supreme Court in Triveni Engineering & Indus. Ltd. vs. Commissioner of Central Excise [2000 (120) E.L.T. 273 (S.C.)] had also observed that while determining whether an article is permanently fastened to anything attached to the earth, both the intention as well as the factum of fastening have to be ascertained from the facts and circumstances of each case and the relevant portion of the judgment is reproduced below: "There can be no doubt that if an article is an immovable property, it cannot be termed as "excisable goods" for purposes of the Act. From a combined reading of the definition of "immovable property" in Section 3 of the Transfer of Property Act, Section 3(25) ....

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....sets were installed in their factory one on 13th March, 1991 and the second on 15th January, 1992. Show Cause Notice dated 2nd July, 1993 was issued to them claiming duty on manufacture of generating sets. The Collector confirmed the demand for duty holding that there was deliberate suppression of the fact of manufacture of generating sets. The Appeal preferred by the Appellants has been dismissed by the Tribunal by the impugned Judgment. 3...................... 4...................... 5...................... 6. It was next submitted that in any event the generating set was immovable property and thus no excise duty was payable on it. We are unable to accept this submission also. It is admitted position that the generating sets have been bolted on a frame. If the generating set is only bolted on a frame it is capable of being unbolted and being shifted from that place. It is then capable of being sold. Under these circumstances it could not be said that the generating sets manufactured by the Appellants are immovable property." (emphasis supplied) 17. The Delhi High Court in Vodafone Mobile Services had examined whether the tower....

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....assimilation by fixing with nuts and bolts on a foundation to provide for stability and wobble free operation cannot be said to be one permanently attached to the earth and therefore, would not constitute an immovable property. Thus, the Tribunal erred in relying on the Bombay High Court in Bharti Airtel Ltd. (supra). It is also important to understand that when the matter was carried out in the Bombay High Court and the judgment was delivered, the whole case proceeded on the presumption that these are immovable properties. The Tribunal failed to appreciate the 'permanency test' as laid down by the Supreme Court in Solid and Correct Engineering (supra)." (emphasis supplied) 18. This issue was also examined at length by a Division Bench of the Tribunal in Reliance Jio Infocomm Ltd. vs. Assistant Commissioner, CGST & Central Excise, Belapur-IV Division [Service Tax Appeal No. 86623 of 2021 decided on 18.04.2022] and it was held that towers and shelters would not be immovable property. 19. In this connection, reliance can also be placed on the following decisions: (i) M/s. Vodafone Mobile Services Limited vs. Commissioner of Central Excise, Jodhpur-(Raj.) [2022 ....

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....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. Indus Towers Ltd. v. CTO, Hyderabad - (2012) 52 VSR 447, which clearly ru....