TaxTMI 
TaxTMI 
2025 (7) TMI 842
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.... Appellant is providing telecommunication services to its subscribers for which it engages and uses services of various other service providers. Consequent to special audit of the Appellant's Accounts, a Show Cause Notice bearing No. 03/2014 - Commr. dated 07.04.2014 was issued to the appellant where it was proposed to disallow Cenvat Credit of Rs.1,81,47,708/- availed by the appellant on inputs and input services, viz., (a) Tower related services i.e., services relating to erection and construction of towers, shelters, electrical and laying of optical fibre cables; (b) post-sale services i.e., commission paid to agents and dealers; and (c) other input services such as catering, insurance, healthcare, police and traffic booth maintenance etc. The total demand pertains to the period October 2008 to March 2013. 2. After following due process of adjudication, the impugned order was passed confirming the entire demand on the following grounds: i. In terms of exclusion clause 'B' of Rule 2(l) of CENVAT Credit Rules, 2004, credit is not available for a civil structure and therefore, the appellant is ineligible for input credit on Tower related services, i.e., services relatin....
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....d its parts has recently been settled by the Hon'ble Supreme Court in the case of M/s. Bharti Airtel Ltd. v. The Commissioner of Central Excise, Pune [2024 SCC OnLine SC 3374] and the other services for which credit is denied involves interpretation of Rule 2(l) of the CENVAT Credit Rules. 4.3 The appellant argued that in the above scenario, extended period cannot be invoked in this case. The judgment of the Hon'ble Supreme Court in Commissioner of Central Excise v. Chemplast Drugs & Liniments [1980 (40) ELT 276 (SC)] has been cited in support of this argument. 4.4 It was further submitted that aspects in relation to sales commission, etc. are also interpretative as seen from various decisions and that other aspects of input services are also matters of interpretation and therefore extended period cannot be invoked. 5.1 On merits, the main argument advanced by the appellant is that credit should be allowed to them in respect of Tower Related Services (Civil Works, Electrical Works, Erection Works, Optical Fiber Cable Laying etc.) as (a) the appellant cannot render output service without mobile towers, for which services are availed for erection of telecommunication towers;....
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....s on the input services. 5.4 The appellant has contended that the demand on Commission Expenses for Collection agent services deserves to be set aside as the appellant would not be able to run its business and provide output services; and therefore, the collection agent services are imperative input services. The appellant has relied on (a) para 14 of the decision in Commissioner of Central Goods & Service Tax, Jaipur Vs. Bharti Hexacom India Ltd. [2023 (5) TMI 520 - CESTAT NEW DELHI]; (b) para 7.1 of the judgment in Vodafone Essar Cellular Limited v. Commr. Of G.S.T. and Central Excise, [2018 (9) TMI 985 - CESTAT CHENNAI]; (c) para 17 of the decision of the Hon'ble CESTAT, Kolkata in M/s Vodafone Idea Ltd v. Commr. of CGST & Central Excise, Kolkata South Commissionerate [2023 (3) TMI 575 - CESTAT Kolkata]; and (d) para 23.1 of the order dated 12.07.2021 passed in Vodafone Mobile Services Ltd. v. Commr. by the Hon'ble Tribunal, Chennai in Service Tax Appeal No. 41188/2017. 5.5 The demand on Service Desk payments has been challenged on the ground that it is an arrangement akin to collection agent as desks/outlets are set up by service providers for collection of dues from vari....
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....he discount provided on behalf of other units of the appellant in the transaction of international roaming. 6. The Ld. Counsel Ms. Shwetha Vasudevan appeared and argued for the appellant and reiterated the above submissions of the Appellant. 7.1 The Ld. Authorized Representative Mr. M. Selvakumar appeared and argued for the Department and submitted that in terms of exclusion clause (A) of the definition of 'input service' under Rule 2(l) of CENVAT Credit Rules, 2004 Service Tax paid on 'specified services' like architect service, commercial construction service, construction of complex service, works contract service etc. availed in relation to construction of a building or a civil structure or part thereof; or for laying foundation or making of structures for structures of capital goods are not eligible for credit as "input service" EXCEPT when they are used for provision of one or more of the specified services to themselves. It was submitted that "Telecommunication Service" is a taxable service and not a specified service and from 01.07.2012 also, 'Telecommunication Service' is not a specified service since it is not a 'works contract'. Therefore, the disallowance of CENVA....
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....terials used for raising towers / shelters and also on the services procured for erection, painting, civil work etc. by treating them as inputs and input services is that towers / shelters are immovable properties, and therefore, they are not capital goods but capital assets. 8. Heard both sides and considered the rival submissions including the evidence available on appeal records and the case laws relied upon. 9. The issues that arise for decision in this appeal relate to denial of Cenvat Credit of Rs.1,81,47,708/- availed by the appellant on inputs and input services, viz. (a) Tower related services i.e., services used to erect and construct towers, shelters, electrical and laying of optical fibre cables; (b) Tower materials like parts, shelter and PFBs (c) post-sale services i.e., commission paid to agents and dealers; and (d) other input services such as catering, insurance, healthcare, police and traffic booth maintenance etc. 10.1 The first issue, viz. Tower related services i.e., services used to erect and construct towers, shelters, electrical and laying of optical fibre cables, is squarely covered by the decision of the Hon'ble Tribunal in the case of Vodafone Id....
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.... "73. The conclusion of CESTAT, denying the assessee Cenvat credit on the premise that the towers erected result in immovable property, is erroneous and plainly contrary to Solid and Correct Engineering (supra). The towers that are received in CKD condition, are erected at site, subsequently, giving rise to a structure that remains, safe and stable (commercial reasons of use). The fact that in the intermediate stage, an immovable structure emerged, is of no consequence, in the facts of the present case. It is a settled principle of law that entitlement of Cenvat credit is to be determined at the time of receipt of the goods. If the goods that are received qualify as inputs or capital goods, the fact that they are later fixed/fastened to the earth for use would not make them a non-excisable commodity when received. The CESTAT failed to consider the fact in the event antennae and BTS are to be relocated, the assessee also has to relocate the tower and the pre-fabricated shelters, thereby, implying that the towers and the prefabricated shelters, are not immovable property. Therefore, the CESTAT erred in relying upon the decision of the Bharti Airtel (supra)." 10.3 Further, in the ....
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....ng. Therefore as per the main part of the definition, the service of recovery agent received by the appellant is an input service. The appellant also claimed that his service is related to "Security" which is specified in the inclusion part of the definition as one of the input service. We find that the vehicle on which the appellant have given the loan is hypothecated with the appellant as the security. Therefore in connection to the recovery of the loan this vehicle is taken under repossession, therefore this service is clearly covered under the definition of "Security" which means "a thing deposit or pledged as a guarantee of the fulfilment of an undertaking or the repayment of the loan, to be forfeited in case of default. In view of this definition the service of taking repossession of the vehicle from the borrower is a part of security service which is specifically included in the definition of input service. For this reason also the service of repossession provided by the recovery agent to the appellant is an input service. Therefore the appellant is clearly entitled for the Cenvat credit on such input service. However it is observed from the submission of the Ld. Counsel tha....
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....n held to be eligible for credit in various decisions as cited in the table. 16. In view of the aforesaid discussion, it has to be held that the respondent was entitled to avail CENVAT Credit of service tax discharged on the commission paid by the respondent to collection agents for collection of dues of post-paid plans from the subscribers. 17. The appeal filed by the Department would, therefore, have to be dismissed and is dismissed." 12. Service Desk Payments are akin to payments to collection agents. Hence the ratio of the decision in Commissioner of Central Goods & Services Tax, Jaipur Vs Bharti Hexacom India Ltd. (supra), which is in favour of the appellant, is applicable. As such, we set aside the demand raised disallowing Cenvat Credit on Commission Agent Services and service desk payments amounting to Rs.85,44,785/-. So, ordered accordingly. 13. As to, outdoor catering services being used by the appellant for business meetings conducted for promotion of appellant's business are covered under "sales promotion" in terms of the inclusive clause of the definition of 'input service' under CENVAT Credit Rules, 2004 and so the Appellant is eligible for ....
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....limitation too. The perusal of the appeal records indicate that multiple Show Cause Notices were issued demanding reversal of Cenvat credit taken on Tower parts and other related services. It was informed that substantial portion of the demands made which is the subject matter of this appeal have already been made vide SCNs whose details were incorporated in their Grounds of Appeal filed. 19.2 The Appellant has relied on the following decisions against limitation: - i. The Hon'ble Apex Court in the case of Anand Nishikawa Co. Ltd. Vs. Commissioner of Central Excise, Meerut [2005 (188) ELT 149 (SC)] has held that when the facts are within the knowledge of the Department and when SCN on the same issue was issued for the earlier period, the Department cannot invoke the extended period of limitation. ii. In the case of Collector of Central Excise Vs. Chemphar Drugs & Liniments [1989 (40) ELT 276 (SC)] it was held therein that when the issue involves interpretation of the provisions of the law, extended period of limitation cannot be invoked. iii. Further, in the case of Nizam Sugar Factory Vs. Collector of Central Excise, AP [2006 (197) ELT 465 (SC)] it wa....