TaxTMI 
TaxTMI 
2026 (10) TMI 8
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....ghavan Ramabadran Mr.Sai Srujan Tayi Senior Standing Counsel 2260 of 2018 Mr.Karthik Sundaram Mr.Sai Srujan Tayi Senior Standing Counsel 2261 of 2018 Mr.Karthik Sundaram Mr.Sai Srujan Tayi Senior Standing Counsel 134 of 2019 Mr.Hari Radhakrishnan Mr.Rajendran Raghavan Senior Standing Counsel 2039 of 2019 Mr.Raghavan Ramabadran Mr.K.S.Ramaswamy Senior Standing Counsel 2077 of 2019 Mr.K.S.Ramaswamy Senior Standing Counsel Mr.Raghavan Ramabadran 2454 and 2455 of 2019 Mr.Sai Srujan Tayi Senior Standing Counsel Mr.Karthik Sundaram 2461 of 2019 Mr.Sai Srujan Tayi Senior Standing Counsel Mr.Karthik Sundaram COMMON JUDGMENT DR. ANITA SUMANTH J. In this batch of appeals, the questions that arise relate to availment of Cenvat Credit on towers and re-fabricated structures/shelters that are part of the Base Transmission Station (BTS). CMA Nos.2260 and 2261 of 2018: 2. CMA Nos.2260 and 2261 of 2018 have been filed by Bharati Airtel Ltd. The substantial questions of law admitted on 10.06.2026 are as follows: (i). Whether the Hon'ble Tribunal misdirected itself in following the decisions in the c....
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.... 11.9.1 What is "attached to the earth" to make it an immovable property would have to possess any of the three attributes as specified under Section 3 of the Transfer of Property of Act, namely, (a) rooted in the earth, as in the case of trees and shrubs; (b) imbedded in the earth, as in the case of walls or buildings; or (c) attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached: 11.9.2 The present items in issue are not the ones which are rooted in the earth as in the case of trees and shrubs [sub-clause (a)]. Therefore, the next consideration will be whether these are embedded in the earth, as in the case of walls or buildings [subclause (b)], or whether these are attached to what is so embedded for the permanent beneficial enjoyment of that to which these are attached to the earth [sub-clause (c)]. The attachment of tower to the earth/building, however, does not partake of the character of walls or buildings imbedded in the earth. 11.9.3 It is on the tower that the antennas are mounted and affixed at proper height, to make these stable. Since the antennas are used for receiving and ....
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....of maintaining stability of the tower and keep it wobble free so that the antenna which is hoisted on it can receive and transmit the electromagnetic signals effectively and without any disturbance. Affixing of the tower to the earth or building is not for the permanent beneficial enjoyment of the land or building, but to make it stable for effective functioning of the antenna for seamless rendering of mobile services by the service provider to the consumers/subscribers. Same is the case with prefabricated buildings (PFB). 11.9.7 If we thus apply the functionality test, it can be stated that the attachment of tower to the earth /building is not for the benefit of the land or the building but for better functioning of the antenna which is fixed on the tower. Thus, based on functionality test it can be said that tower is a movable property, as also held in Municipal Corporation of Greater Bombay (supra). 11.9.8 These items are not embedded in the earth as in the case of walls or buildings so as to fall under clause (b) of the definition of "attached to the earth" as provided under Section 3 of the Transfer of Property of Act. Neither do these items fall und....
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....een that the annexation is not for permanent annexation to the land or the building as the tower can be removed or relocated without causing damage to it. It is also to be noted that the attachment of the tower to the building or the land is not for the permanent enjoyment of the building or the land. Further, the tower is fixed to the land or building for enhancing the operational efficacy and proper functioning of the antenna which is fixed on the tower by making it stable and wobble free. The fact that the tower, if required can be removed, dismantled in the CKD and SKD and sold in the market is not disputed. Application of the tests evolved and discussed above on these items clearly points to the movability as opposed to immovability of these items. We are, thus, of the view that mobile towers and PFBs are movable properties and hence, "goods". .......... 11.10 We now proceed to the next stage of consideration. Even if it is held that the mobile towers and PFBs are movable properties and "goods", the question which still requires to be answered is whether these are "capital goods" within the meaning of Rule 2(a)(A) of the CE....
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....and PFBs are not immovable properties and can be treated as "goods", we have to examine whether these are to be treated as accessories of antenna and BTS (which are "capital goods") as claimed by the Assessee's and if so, being accessory of antenna/ BTS, all these are covered within the meaning of "capital goods" under Rule 2(a)(A) (iii) and since these accessories of capital goods are used for providing output service i.e. mobile service, whether the service providers would be entitled to take CENVAT credit by virtue of Rule 3(i) of the CENVAT Rules. ........... 4. After a discussion of the dictionary meaning of the term 'accessory' and the judgment of the Supreme Court in Tata Teleservices Ltd. v. Bharat Sanchar Nigam Ltd. & Ors. [(2008) 10 SCC 556], this is what the Bench says: 11.11.10 Thus, in our opinion, the restricted meaning of accessory given by the CESTAT and not differed from by the Bombay High Court is not wholly correct in as much as the meaning of accessory can have different ascribed meanings as observed in the aforesaid decision. 11.11.11 There is no dispute to the fact that BTS is a composite system consisting of the transmitter, rece....
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....sel for the assessee states that per order dated 10.10.2018, deposit of a sum of Rs. 56,06,101/- was made as a pre-condition for grant of stay of recovery. In light of the order passed now allowing the appeals, the assessee is entitled to refund which shall be paid over within a period of four (4) weeks from date of receipt of a copy of this order. CMA Nos.2077 and 2461 of 2019: 8. These appeals have been filed by the Department and respondent/assessee is Vodafone Essar South Ltd. The substantial questions of law admitted on 10.06.2025 are as follows: (i). Whether the Hon'ble CESTAT is correct in allowing the CENVAT credit on Erection & Commissioning services as eligible input service merely on the basis consumption of the services, but totally oblivious of the fact that the said services were not in conformity to the definition of "input service" defined in Rule 2(l) of CENVAT Credit Rules 2004; (ii). Whether the Hon'ble CESTAT is correct in allowing the CENVAT credit on rent-a cab, outdoor catering, authorized service Station, Tour operators without eliminating the usage of such services for personal use or consumption ? (iii). Whether the....
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....nd hence, as a consequence, services rendered in connection with the erection and commissioning of the Towers and PFBs would be entitled to cenvat credit. 14. That apart, the definition of 'input services' under Rule 2(l) of the Cenvat Credit Rules, 2004 (in short '2004 Rules') is wide and inclusive and enables obtaining of credit in respect of services used in relation to setting up of a factory. The activities of erection and commissioning are hence encompassed within the scope of the definition of 'services'. 15. Moreover, the same issue had arisen in the case of this assessee, both in the Tribunals at Chennai and Bombay and vide decisions dated 14.07.2025 and 26.08.2025 in Service Tax Appeal Nos.41118 of 2015 and 41740 of 2015, and have been held in favour of the assessee following the decision of the Tribunal in Vodafone Idea Ltd. V. CST. Mumbai [(2024 (10) TMI 149 - Cestat Mumbai)], the relevant portion of which reads thus: "7. The referral Bench has referred the issue to the Larger Bench because according to them the issue about admissibility of Cenvat credit in respect of input services used for erection and commissioning of Telecom Towers by the Telecom Serv....
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....in Rule 2(l) of CENVAT Credit Rules 2004; (ii). Whether the Hon'ble CESTAT is correct in allowing the CENVAT credit on rent-a cab, outdoor catering, authorized service Station, Tour operators without eliminating the usage of such services for personal use or consumption ? (iii). Whether the Hon'ble CESTAT is correct in setting aside the denial of exemption under Notification 4/2004 when the telecom services had not been wholly consumed and utilized within the SEZ? 18. Adverting to the first question, the order of the CESTAT contains a bifurcation of the cenvat credit in relation to services rendered qua towers and shelters at a sum of Rs. 22,25,538/-. Following our decision in CMA Nos.2077 and 2461 of 2019, and as the facts and legal position are identical to that matter, substantial question of law No.1 is decided in favour of the assessee. 19. Question of law No.2 relates to cenvat credit on rent-a-cab, outdoor catering, authorized service station and tour operators. While the revenue does not per se assail the eligibility of the assessee to credit in respect of the aforesaid services, they would submit that a percentage thereof would have to be re....
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....h of issues canvassed falls under the limit stipulated under the Litigation Policy in Notification F.No.160390/20/2024-JC-CBEC dated 06.08.2024. 25. The Notification provides for withdrawal of matters below the monetary limits fixed, and paragraph 3 states that matters be contested in cases where the constitutional validity of the provisions is under challenge or Notification/Instruction/Orders/Circulars has been held to be illegal or ultra vires. 26. According to Mr.Sai Srujan Tayi, the monetary impact of an appeal would depend on all the issues raised, irrespective of whether the question has been admitted or not. We disagree. While the cumulative monetary impact of all questions raised in the appeal is Rs. 9,47,22,210/-, the substantial questions in respect of buildings and pre-fabricated structures were not admitted owing to the judgment of the Supreme Court in Bharti Airtel (Foot Note Supra (1)) that was adverse to the revenue. The monetary limit of the questions that remain is stated to be 72.02 lakhs (approx.) that falls below the tax limit. However, seeing as we have heard and decided the appeals on merits, this submission is rendered academic. CMA Nos.1822 and 182....