TaxTMI 
TaxTMI 
2024 (10) TMI 149
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....rent locations. At each of these, some of the equipment is mounted on 'towers' while others are placed in prefab shelters for protection from the elements. The appellant took the credit of service tax paid on various input services such as construction service, erection, commissioning & installing services, technical testing & analysis services which were used by them for commissioning and erection of BTS Towers/Shelters. The department's view was that installation of BTS Tower has no connection with the provision of output services as erection, commission and installation of such towers at site alongiwht their shelters are in the nature of immovable property as they embedded to earth and therefore do not fall under the category of goods itself and as such these goods on which Cenvat Credit has been availed have not been used to provide the output service and the input services which have been utilized for erection, commissioning and installation of these BTS Towers also inadmissible as these are relation to installation of such towers and accordingly three show cause notices dated 29.9.2010 for the period April, 2005 to September, 2009, 21.4.2011 for the period October, 2009 to Se....
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....on of the coordinate benches survives as precedent to the extent appropriate to the facts of the present dispute.' 5. After the decision of the Larger Bench, instant appeal has been listed before us for disposal. We have heard learned Chartered Accountant for the appellant and learned Authorised Representative for the Revenue and perused the case records including the synopsis as well as case laws placed on record. Learned Chartered Accountant for the appellant submits that the Larger Bench has answered the issue about the admissibility of the CENVAT Credit in favour of the appellant and prayed that in the light of the decision of the larger Bench, the instant appeal may be allowed. 6. It is not out of place to reproduce the relevant paragraphs/findings of the Larger Bench's interim order in the instant appeal, which are as under:- "2. It would, thus, appear that the referral bench was concerned that four decisions on eligibility of the impugned 'input service' before it were, in its opinion, not in accord with Bharti Airtel Ltd, which, though rendered in dispute over eligibility of 'inputs', should nonetheless, for having arisen from the same impugned activity and owing to ....
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.... fixed to the ground for stability; on all counts, assessees were held to be ineligible. The referral bench was inclined to apply the same yardstick for both because 'input services' had, admittedly, been procured for erection and commissioning of 'towers', on which equipment were mounted, or of 'prefab shelters', in which equipment was placed, and thereby, for the same 'immoveable property' which, for availing credit of duty on 'inputs', was held as ineligible. 4. The controversy induced thereby is that impost levied on rendering of 'taxable service' deployed in connection with any process that did not yield 'excisable goods' is not eligible to be claimed as credit under CENVAT Credit Rules, 2004 in the absence of nexus that 'structure' has with 'output service' which is the essence of entitlement. In effect, the proposition is that 'taxable service' has merged into 'structures' that, one way or other, are outside the ambit of central excise law as held in Bharti Airtel Ltd and, hence, ineligible. That the brooding presence of a central excise dispute, of yore and over exigibility of 'on site fabrication of goods' to duties chargeable on manufacture, continues to haunt the alter....
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....ipment required for providing 'telecommunication service' were mounted. He submitted that the structures themselves were not relevant to availing of credit by them as '3. CENVAT credit. - (1) ......a provider of taxable service shall be allowed to take credit (hereinafter referred to as CENVAT credit) of - ...(ix) the service tax leviable under section 66 of the Finance Act: and (x) the Education Cess on taxable services leviable under section 91 read with section 95 of the Finance Act (No.2) Act, 2004 (23 of 2004), paid on - (i) any input or capital goods received in the ..premises of the provider of output service....and (ii) any input service received..... by the provider of output service....' of CENVAT Credit Rules, 2004 distinguished between credit on 'input' and on 'input service' that could be availed by manufacturer of final product and provider of output service. He argued that the deployment of expressions to define 'input' and 'input service', in rule 2(k) and 2(l) of CENVAT Credit Rules, 2004 respectively, leaves no room for doubt that the two stood on entirely different foundations that did not lend itself to adaptation in the manner opined by the referral b....
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....in addition, the first did include disallowance of credit of duty paid on procurement of 'printers' and 'chairs' while the other, in which disallowance of credit of duty paid on 'antennas' was proposed, was restricted to 'tower parts' and 'prefab shelters' procured by assessee. Doubtlessly, the dispute in Bharti Airtel Ltd did not venture upon 'input service' which is germane to the appeal now before us. xxx xxx xxx 18. In disposing off the two appeals, against the separate upholding of both by the Tribunal, together, the Hon'ble High Court framed three issues, arising from submissions made on behalf the assessee to counter the upheld findings, for determination. These were: that the assembled 'tower parts' and 'prefab shelters' were not immovable property, that the assembled 'tower parts' and 'prefab shelters', of their own and owing to deployment with equipment required for rendering 'telecommunication service', are 'capital goods', and that these are 'components and parts' of goods enumerated as tariff items in the definition. That the elaborate findings which disallowed entitlement to credit of duty paid on 'inputs' deployed in connection with 'immovable property' which 'te....
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....pro Ltd, Bellsonica Auto Components Ltd and Reliance Industries Ltd, there is a wealth of relevant jurisprudence to assist in responding to the reference before us. xxx xxx xxx 24. It, therefore, emerges that 'input' and 'input services' stand in their respective, and mutually exclusive, contexts for the purpose of CENVAT Credit Rules, 2004. The wide latitude of 'input service', even in the post-2011 situation, permits credit of 'input service' subject to evaluation of deployment in each case. The subsequent restriction manifests even more extensive intent to cover 'construction services' too in the pre-amendment era. The chain of 'input', owing to tangibility, is tested in its contribution to the taxable service while the chain of 'input service', owing to inability to be absorbed on utilization for production or rendering of service, is tested by use in the hands of the recipient who provides taxable service. The break in chain of manufacture, and only derived impliedly from Bharti Airtel Ltd, was not the sole ground for denial of credit of duty paid on goods that were erroneously claimed to be 'capital goods' and wrongly claimed, in the alternative, to be 'input' and does no....