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2017 (2) TMI 385 - AT - Service TaxCENVAT Credit - inputs - angles, channels and beams etc., used to erect the towers and pre-fabricated buildings on which transmission equipments were installed - Held that - the matter is already been decided against the appellant by Hon ble High Court of Bombay in the case of Bharti Airtel Ltd., Vs CCE, Pune-III 2014 (9) TMI 38 - BOMBAY HIGH COURT , where on similar inputs, it was held that the subject items are neither capital goods u/r 2(a) nor inputs u/r 2(k) of the Credit Rules - the appellant-assessee will not be eligible to avail the cenvat credit on angles, channels and beams etc. used to erect the impugned towers. Imposition of penalty - Held that - the issue is interpretational in nature. Concerning the eligibility of credit on the parts used in the towers, there has been sufficient confusion in the matter. It is also not disputed that there was more than one view in the matter - penalty set aside - extended period of limitation also set aside. Appeal disposed off - decided partly in favor of assessee.
Issues:
Eligibility of CENVAT Credit on angles, channels, and beams used for towers and pre-fabricated buildings. Analysis: The issue in dispute pertains to the eligibility of CENVAT Credit on angles, channels, and beams used in erecting towers and pre-fabricated buildings for installing transmission equipment. The appellant, engaged in providing Telecommunication Services, availed CENVAT Credit on towers and shelter/pre-fabricated buildings used for rendering output services. The towers hoist Microwave and GSM antennas at specific heights for optimal cellular network coverage, while the shelter houses critical BTS equipment protecting them from environmental factors. The Commissioner denied credit for towers, considering them as structural support rather than capital goods. The denial extended to pre-fabricated buildings and towers, categorized as non-capital goods under the CENVAT Credit Rules, 2004. The appellant argued against the invocation of the extended period of limitation, emphasizing no intention to contravene rules, and requested penalty waiver due to the interpretational nature of the issue. The department reiterated the correctness of the impugned order, leading to a hearing where both sides presented their arguments. The Tribunal noted previous judgments by the Hon'ble High Court of Bombay and a Larger Bench decision favoring the Revenue, indicating a precedent against the appellant. Consequently, the Tribunal aligned with these decisions, ruling against the appellant's eligibility for CENVAT Credit on the components used in erecting towers. Regarding penalties, the Tribunal acknowledged the interpretational nature of the issue, citing confusion and multiple conflicting views. Applying legal precedents from the Hon'ble Apex Court and Coordinate Benches, the Tribunal set aside penalties imposed on the appellant. The Tribunal also annulled a demand barred by limitation and upheld a demand for the normal period. Specifically, the penalty under Rule 15(4) of the CENVAT Credit Rules, 2004, along with the demand for the normal period, was sustained. The Tribunal concluded the appeal by providing consequential reliefs as necessary, in accordance with the detailed analysis and legal considerations presented during the proceedings.
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