TaxTMI 
TaxTMI 
2025 (2) TMI 559
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....oner 2,70,26,033/- 2005-06 to 2008-09 2. IV(4)11/S.Tax-Adjn/B-I/2011/9082A dated 15.04.2011 Additional Commissioner 34,42,039/- 2009-10 1.2. The above Show Cause Notices were adjudicated vide the impugned Order-in-Original No. COMMR/B-I/ST-34-35/2012 dated 30.01.2013 wherein the Ld. Commissioner has disallowed CENVAT Credit amounting to Rs.3,01,71,279/- and also imposed an amount equal to the credit disallowed as penalty under Section 78 of the Finance Act, 1994 read with Rule 15(3) of the CENVAT Credit Rules, 2004. 2. Aggrieved by the disallowance of credit and imposition of penalty, the Appellant has filed this appeal. 3. The Appellant has summarized the credit disallowed on various items as under: Sl. No. Name of goods/services received Category under which credit availed Amount of CENVAT Credit denied (in Rs.) 1 Electrical Transmission Tower Materials Capital goods 90,44,256/- 2 132 KVD/CTLNT Towers Capital goods 3,78,909/- 3 Mild Steel Section for Templates Capital goods 6,47,769/- 4 Health Insurance of staff and family Input service 1,00,569/- 5 Port Insurance Input service ....
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.... it is the contention of the Appellant that the same are parts and accessories of capital goods and thus fall within the definition of "capital goods" as defined under Rule 2(a) of the CENVAT Credit Rules, 2004. Thus, it is their submission that the denial of credit on these items is not legally sustainable. 3.3. In support of their contention that the items covered under Sl. Nos. 1 to 3 of the Table reproduced above are eligible for credit being "capital goods", the Appellant have cited the judgement in the case of M/s. Bharti Airtel Ltd. v. Commissioner of Central Excise, Pune [2024 (11) TMI 1042 - Supreme Court] wherein the Hon'ble Apex Court has allowed the credit in respect of similar items/goods holding the same as components/accessories of capital goods falling under sub-clause (i) of Rule 2(a)(A) of the CENVAT Credit Rules, 2004. In this regard, they have also relied upon the decision of this Tribunal in the case of M/s. Vodafone Essar South Ltd. v Commissioner of Service Tax, Kolkata [2024 (1) TMI 936 - CESTAT, Kolkata] (Final Order No. 77210 of 2023 dated 27.09.2023 in Service Tax Appeal No. 70576 of 2013 - CESTAT, Kolkata]. Submissions regarding Sl. No. 4: 4. Re....
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....s with the output service to be provided by the port, and hence, they are entitled for the CENVAT Credit availed in respect of the input services used in connection with the railway connectivity project. 5.1. With regard to the CENVAT Credit disallowed of Rs. 84,05,618/- on "Supervision charges for construction of Electrical Transmission Towers" (Sl. No. 7 of the above Table), it is their submission that DPCL has entered into long term agreement with M/s. Orissa Power Transmission Corporation Ltd. (OPTCL) vide agreement dated 28.05.2007 for supply of power to the port involving transmission lines of OPTCL; in the process of laying the transmission lines from Bhadrak to Dhamra, OPTCL was to be consulted for re-routing of EHT line crossings at different locations. The Appellant states that this is a part of the construction of 132 KVA line for the purpose of power supply to the port. Hence, it is contended that credit availed in respect of supervision charges for constructing electric lines along the railway siding paid to OPTCL is admissible. 5.2. In respect of the credit denied to the Appellant on "Port Insurance", "House Keeping Service", "Advisory Service", "Renting of Immo....
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....reed to reverse Rs.25,544/- on the bills not raised in its name, out of the disputed credit of Rs.9,65,903/- before the ld. adjudicating authority. They submit that the other defects are curable in terms of Rule 9 of the CENVAT Credit Rules and as such the same cannot be a ground for denying the credit. In this regard, the Appellant contends that the provisions of sub-rule (2) of Rule 9 as it existed prior to 01.03.2007, do not require the mentioning of service tax registration number and jurisdictional Central Excise Range of the service provider. 7. On the other hand, the Ld. Authorized Representative of the Revenue reiterated the findings in the impugned order. 8. Heard both sides and perused the appeal records. 9. We find that the ld. adjudicating authority, in the impugned order, has denied CENVAT Credit on various items/services availed during the period from 2005-06 to 2009-10. 10. Regarding the items listed at Sl. No(s). 1, 2 and 3 of the Table given at paragraph 3 of this Order viz. Electrical Transmission Tower Materials", "132 KVD/CTLNT Towers" and "Mild Steel Section for Templates", we find that these items are covered under the definition of "capital goods"....
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....ing under sub-clause (i) of Rule 2(a)(A) of the CENVAT Credit Rules, 2004. The relevant portion of the said judgement reads as under: - "11.11.5 What comes out from the above dictionary meaning of "accessory" is that any such item which adds to the beauty, convenience or effectiveness of some other items can be said to be accessory of that other thing and it may or may not be essential for functioning of main machinery. Seen from the above perspective what is evident is that the tower is a structure fixed to the earth or building on which microwave antenna is fastened to provide the necessary height and stability to the antenna by making it steady and wobble free. The function of antenna as part of the BTS is to receive and transmit radio signal and is used for providing mobile telecom service to the subscribers. The tower itself is not an electrical component of microwave antenna per-se, yet it is necessary and helps in keeping the antenna at proper height and in a stable position so that the antenna can transmit signals for ensuring uninterrupted and seamless services to the subscribers. It is with the aid of the tower that the potential of the antenna is fully realised,....
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....sub-clause (i) of Rule 2(a)(A) of CENVAT Rules. Further, since these are used for providing output service, i.e., mobile telecommunication service, and since these are "capital goods" received in the premises of the provider of output service as contemplated under Rule 3(1)(i), the Assessees would be entitled to CENVAT credit on the excise duties paid on these goods." 10.3. Thus, by relying on the decision of the Hon'ble Apex Court referred to supra, we hold that the Appellant is eligible for the credit in respect of "Electrical Transmission Tower Materials", "132 KVD/CTLNT Towers" and "Mild Steel Section for Templates". Accordingly, the denial of CENVAT Credit to the appellant on this count is set aside. 11. Regarding the denial of credit in respect of "Health Insurance of staff and family" (Sl. No. 4 of the Table supra), we observe that provision of medical facilities within the Port Area is a pre-requisite for obtaining approval for the port under the Major Port Trust Act, 1963 and the Indian Ports Act, 1908. It has been stated by the Appellant that they have an insurance policy to cover the hospitalization expenses of the employees and their family members as per the ....
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....on to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal; (Emphasis supplied) 12.2. We observe that the term 'business' mentioned in the definition of "input service" mentioned above, is a wider concept and must be construed in widest amplitude to cover entire gamut of activities which an entity is engaged into or dealing with in the course or furtherance of its very existence. 12.3. We find that the said services have been rendered by the Appellant in connection with their business activity. The Department has failed to substantiate the claim of lack of nexus of these services with the provision of output services. We also find it relevant to refer to the decision rendered....
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.... it may be is not contemplated by the definition of "input service" and that a line has to be drawn somewhere to avoid undue extension of the phrases 'directly or indirectly' and 'in or in relation to by adopting a common sense approach. Immovable property is neither service nor goods and, therefore, input credit cannot be taken. Although civil construction work is a taxable service under the Finance Act, 1994, it is basically civil in nature relatable to the immovable property not chargeable to central excise duty. Immovable property is neither 'service' nor 'goods'. Input credit is not available to them. Commercial or industrial construction service or works contract service is an input service for immovable property which is neither subjected to central excise duty nor to service tax. In this regard, the Commissioner referred to a CBEC Circular dated 04.01.2008. The Commissioner also held that the service tax paid on lease rentals is not covered under the "input service" as the same is not remotely connected to the manufacturing activity and that the nexus thereof with the manufacture of the final product is far-fetched as the same is not use....
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....lustrative. The words "includes services" establish the same. It can hardly be suggested that the lease rental is not for the use of the land in relation to the manufacture of the final product." Resultantly, the findings of the Tribunal as such denying the benefit had been set aside. The co-ordinate Bench in Maruti Suzuki's case (supra) also has taken the same view wherein, the service tax was being paid on the Mandap Keeper services and Rent-a-Cab services and resultantly, it was held that it is part of the business expenditure incurred by the assessee to promote the sales and for efficiently running of the business and the appeals of the Revenue were dismissed. The relevant portion reads thus:- "23. In view of the aforesaid wide and expansive interpretation of the term 'input service' we find the Mandap Keeper Services used to organize meetings and events for promotion of their products such as a new vehicle launch, sales promotion events and also for business dealer meets, conferences, Executive Level Meetings etc. which activities being important for the respondent to promote the sale of vehicles are connected to the business of manufactu....
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....goods for export by manufacturer, exporter, shipping bill is filed by the manufacturer exporter and goods are handed over to the shipping line. After Let Export Order is issued, it is the responsibility of the shipping line to ship the goods to the foreign buyer with the exporter having no control over the goods. In such a situation, transfer of property can be said to have taken place at the port where the shipping bill is filed by the manufacturer exporter and place of removal would be this Port/ICD/FCS. Needless to say, eligibility to CENVAT Credit shall be determined accordingly." Keeping in view the above, we are of the considered opinion that the Cenvat Credit has been rightly granted to large extent by the Commissioner and the benefit which had been declined has been rightly allowed by the Tribunal by modifying the order of the Commissioner. In such circumstances, we do not find any question of law arising for consideration as projected by counsel for the appellant-revenue and the appeal accordingly stands dismissed." 12.4. In view of the above discussion and by relying on the decision of the Hon'ble High Court cited supra, we hold that the Appellant is ....
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....ragraph 2.2. (ab) therein, as far the ground of credit availed on improper documentation is concerned: - "ab. Credit availed on improper documents: On the allegation of availment of credit of Rs.9,65,903/ on the ground of improper documents/short comings such as non mention of registration no., service category, jurisdictional Central Excise Range of the service provider, non-issue of bills in the name of DPCL, etc. it has been submitted that the definition of input service is very wide and not restricts to services given in the definition but also covers services which are related to business activities. On this issue, DPCL have agreed to reverse Rs.25,544/- on the bills not raised in its name, out of the disputed credit of Rs.9,65,903/-. The other defects are curable in terms of Rule 9 of the CCR,04 and as such the same can not be a ground for denying the credit. The provisions of sub-rule(2) of Rule 9 as it existed prior to 01.03.2007, do not require the mentioning of service tax registration number and jurisdictional Central Excise Range of the service provider. Therefore, the objections raised on this account relating to the period 2005-06 and 2006-07 are not tenable.....