2017 (4) TMI 1131 - AT - Service Tax

CENVAT credit - providing passive infrastructure - Entitlement of Cenvat credit of service tax and duty of excise - duty paid on input materials and also on Service Tax paid on charges for clearing the said materials from Customs - Renting of Immovable Property service - Held that - the issue is no more res integra in view of the decision of larger Bench of the Tribunal in Tower Vision India Pvt.Ltd. 2016 (3) TMI 165 - CESTAT NEW DELHI (LB) , where it was held that appellants are paying service tax under the category of Business Auxiliary Services , or Business Support Services for providing passive infrastructure, the appellants are not entitled to take Cenvat credit on towers, pre-fabricated shelters parts thereof etc, it was also held that the appellant is not entitled to take Cenvat credit to the tune of ₹ 2,59,95,327/- on shelters/parts as capital goods wherein the supplier has paid Excise duty on these items by classifying under Chapter 85 of the CETA, 1985 - appeal dismissed - decided against appellant.

Summary

Issues:
Claim of Cenvat credit on input materials and Service Tax paid on charges for clearing materials disallowed - Appeal against Order-in-Original - Interpretation of relevant case laws - Entitlement to Cenvat credit on towers, pre-fabricated shelters, and parts thereof - Decision of Larger Bench of the Tribunal - Dispute on credit eligibility of goods as inputs or capital goods.

Analysis:
The appellant, a provider of Renting of Immovable Property service, had claimed credit of Cenvat duty on input materials and Service Tax paid on clearing charges, which was disallowed in an Order-in-Original. The appellant appealed the decision, citing the judgment of the Hon'ble Andhra Pradesh High Court in a related case. The Revenue, however, referenced the decision of a larger Bench of the Tribunal in a different case to counter the appellant's claim. The Tribunal examined the issue in light of the larger Bench's decision and relevant case laws.

The Larger Bench had considered whether appellants paying service tax under specific categories were entitled to take Cenvat credit on certain items. The Tribunal noted the arguments presented by both sides and the questions raised before the Larger Bench. The Tribunal reproduced relevant paragraphs from the Larger Bench's decision, which highlighted the conflicting views on the entitlement to Cenvat credit on specific goods. The Larger Bench's decision was based on detailed analyses and references to judgments from various High Courts, emphasizing the importance of following rulings on similar facts.

In the present case, the Tribunal found that the appellant's situation aligned with the decision of the Larger Bench. By following the ratio laid down by the Larger Bench and considering the lower authorities' findings, the Tribunal concluded that there was no error in the lower authorities' order. Therefore, the appeal filed by the appellant was dismissed based on the precedent set by the Larger Bench's decision and the findings of the lower authorities. The Tribunal pronounced and dictated the decision in open court, affirming the dismissal of the appeal.