2014 (4) TMI 1037 - AT - Service Tax

Waiver of pre deposit - Mobile Telephone Services - Held that - as on date no other company providing similar services has been made to pre-deposit any money on this issue for hearing their appeal. Therefore, we consider it proper to maintain parity among the various parties involved on the same issue. Hence, we order waiver of the requirement of pre-deposit of dues arising from the impugned orders for admission of the appeals and stay collection of such dues during the pendency of the appeals - Stay granted.

Summary

Issues:
1. Whether Cenvat credit for angles, channels, etc., used in the construction of towers can be considered as 'capital goods' or 'inputs' under Cenvat Credit Rules, 2004.
2. Whether waiver of pre-deposit of dues for admission of appeal should be granted in this case.

Analysis:
1. The judgment deals with the issue of Cenvat credit eligibility for goods used in the construction of communication towers. The appellants argued that these goods should be considered as 'capital goods' under Rule 2(a) of the Cenvat Credit Rules, 2004. The Tribunal referred to previous cases where similar issues were raised and discussed. In the case of Bharati Airtel Ltd., the Tribunal disallowed the credit, but the Bombay High Court stayed the order. The Tribunal also mentioned a case involving M/s. Essar Telecom Infrastructure Pvt. Ltd., where pre-deposit was directed but later stayed by the Bombay High Court. The Tribunal noted that no credit recovery has been made from any assessee in similar situations who approached the Tribunal or Courts. Ultimately, the Tribunal decided to maintain parity among parties and ordered waiver of pre-deposit of dues for admission of appeals and stay on the collection of such dues during the appeal process.

2. The judgment also addresses the issue of whether pre-deposit should be ordered based on previous legal precedents. The Authorized Representative for Revenue cited cases related to excisable goods manufacture to argue for pre-deposit. However, the Tribunal differentiated between tangible excisable products and intangible output services, highlighting the varying degree of nexus that can be established. The Tribunal also mentioned doubts raised on the decision of the Hon'ble Apex Court in a specific case, which was referred to a larger bench. Considering that no other company providing similar services was required to pre-deposit money for appeal hearings on the same issue, the Tribunal decided to grant waiver of pre-deposit to maintain parity among all parties involved in similar situations.