2017 (6) TMI 578 - AT - Service Tax

CENVAT credit - L.N. Tower - denial on the ground that these towers are neither input nor capital goods - Held that - The matter was decided by the Larger Bench of this Tribunal in the year 2016 itself wherein the Larger Bench of this Tribunal decided that on LN Towers, the assessee is not entitle to take Cenvat Credit. Extended period of limitation - Held that - As the issue itself is in dispute whether the assessee is entitle to take CENVAT Credit on Towers. In that circumstances, the extended period of limitation is not invokable. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of Cenvat Credit on L.N. Towers for the period 2004-05 and 2005-2006.
2. Entitlement of the appellant to avail Cenvat Credit on L.N. Towers as capital goods or inputs.
3. Invokability of the extended period of limitation for issuing show cause notice.

Analysis:
1. The appellant appealed against the denial of Cenvat Credit on L.N. Towers for the mentioned period. The impugned order raised the issue that the towers are neither considered input nor capital goods, thus questioning the appellant's eligibility for Cenvat Credit on them. The show cause notice was issued invoking an extended period of limitation on 13.02.2009.

2. The main issue revolved around whether the appellant could avail Cenvat Credit on L.N. Towers as either capital goods or inputs. The Tribunal noted that this issue was still under dispute, citing cases pending before the Hon'ble Apex Court and the Larger Bench of the Tribunal. The Tribunal referred to a previous decision by the Larger Bench that denied Cenvat Credit on LN Towers. Consequently, the Tribunal held that the extended period of limitation was not applicable due to the ongoing dispute regarding the eligibility of Cenvat Credit on the towers.

3. The Tribunal considered the invokability of the extended period of limitation for issuing the show cause notice. The Advocate for the Respondent argued that the notice was issued within the permissible time frame based on a decision of the Hon'ble Apex Court. However, the Tribunal found that since the admissibility of Cenvat Credit was still uncertain, and the notice was issued invoking the extended period of limitation, it was deemed barred by limitation. Therefore, the Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the appeal with any consequential relief.

In conclusion, the judgment highlighted the ongoing dispute over the eligibility of Cenvat Credit on L.N. Towers, leading to the dismissal of the extended period of limitation for issuing the show cause notice and ultimately ruling in favor of the appellant.