2016 (10) TMI 1197 - AT - Service Tax

CENVAT credit - inputs services - services used for erection of towers and shelters - denial on the ground that these are not goods but immoveable property on which tax paid on utilised services is not entitled as credit that the input services have no nexus with the output services - Held that - The issue is squarely covered by the decision in the case of IDEA CELLULAR LTD. VERSUS COMMISSIONER OF SERVICE TAX MUMBAI 2016 (9) TMI 1136 - CESTAT MUMBAI where it was held that CENVAT credit availed of service tax paid on services utilized for erection of tower allowed - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of credit of duty paid on inputs and tax paid on services for the appellant.
2. Denial of credit on services used for erection of towers and shelters.
3. Interpretation of tax authorities regarding credit availed by the appellant.
4. Applicability of previous judgments on similar issues.

Analysis:
1. The appellant, M/s Idea Cellular Ltd, appealed against the order-in-original dated 31st March 2016, seeking credit for duty paid on optical fibre ducts and tax paid on various services utilized in the erection of towers and shelters. The tax authorities contested the credit amounting to &8377; 89,45,470 and &8377; 2,52,60,266 on inputs for different periods, along with credit of tax paid on services totaling &8377; 7,90,826, &8377; 10,61,933, and &8377; 30,25,781 for various periods.

2. The impugned order allowed credit on inputs but denied a portion of credit amounting to ` 48,78,540 on services used for the erection of towers and shelters. The denial was based on the argument that these services were related to immovable property, not goods, and therefore not entitled to credit. This decision referenced previous judgments and did not consider the appellant's submissions.

3. During the hearing, the Learned Chartered Accountant and Learned Authorized Representative presented arguments. The issue was found to be covered by a previous Tribunal decision in the appellant's case, which concluded that CENVAT credit could be availed on service tax paid for services used in the erection of towers. This decision was based on a detailed analysis of the issue from various angles.

4. The Tribunal upheld the appellant's appeal, stating that the credit had been correctly availed and that the denial in the impugned order lacked legal authority. The decision was based on the precedent set by the Tribunal's previous order in the appellant's case, emphasizing the applicability of CENVAT credit for service tax paid on services utilized in the erection of towers. The appeal was allowed, and the judgment was pronounced in court.