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2017 (9) TMI 157 - AT - Service TaxCENVAT credit - prefabricated, buildings/shelters for telecommunication services - Held that - the Larger Bench of this Tribunal in the case of Tower Vision India Pvt.Ltd. and others 2016 (3) TMI 165 - CESTAT NEW DELHI (LB) has held that cenvat credit is not available on the above said items, as they have become immovable property and get affixed to the earth - the appellant is not entitled to avail the cenvat credit on the items in question - demand upheld. Extended period of limitation - penalty - Held that - the issue of Cenvat Credit in respect of telecom towers, PFB and parts thereof was debatable and could not have been said to be free from doubt during the relevant period and substantial question of law was the subject matter before the Division Bench of the Tribunal as well as Larger Bench and earlier Hon ble High Court of Bombay. In these circumstances, the extended period of limitation could not apply, especially when both the members of referral bench had held that the extended period was not invokable - penalty is also not imposable - extended period of limitation and penalty not imposable. Demands within period of limitation along with interest are upheld - extended period not imposed - Penalties imposed are set aside - appeal allowed - decided partly in favor of appellant.
Issues Involved:
1. Admissibility of Cenvat credit on prefabricated buildings/shelters. 2. Applicability of the extended period of limitation. 3. Imposition of penalties. Detailed Analysis: 1. Admissibility of Cenvat Credit on Prefabricated Buildings/Shelters: The core issue was whether Cenvat credit availed on prefabricated buildings/shelters used for telecommunication services was admissible. The adjudicating authority demanded recovery of Cenvat credit amounting to ?29,33,396/- and ?11,81,895/- along with interest and imposed equivalent penalties. The appellant argued that they were entitled to Cenvat credit as they were providing telecommunication services and relied on several case laws, including CCE, Delhi-III vs. Bellsonica Auto Components India P. Ltd., and General Manager, Consumer Mobility, BSNL Ltd. vs. CCE, Chandigarh. However, the respondent relied on the decision of the Hon’ble Bombay High Court in Bharti Airtel Ltd. vs. CCE, Pune-III, which held that Cenvat credit on such items was not admissible as they become immovable property. The Tribunal found that the issue was no longer res integra, as the Larger Bench of the Tribunal in Tower Vision India Pvt. Ltd. had held that Cenvat credit on prefabricated buildings/shelters was not available as they become immovable property. 2. Applicability of the Extended Period of Limitation: The appellant contended that the extended period of limitation was not applicable as there was no suppression of facts or malafide intention. The Tribunal observed that the issue of Cenvat credit on the items in question was debatable and had been referred to a Larger Bench for resolution. Given the conflicting judicial pronouncements and the fact that the matter was not free from doubt, the Tribunal held that the extended period of limitation could not be invoked. The Tribunal referred to the decision in Continental Foundation Joint Venture vs. CCE, Chandigarh, where the Supreme Court held that when there is scope for doubt in the mind of an assessee on a particular issue, the longer period of limitation cannot be invoked. 3. Imposition of Penalties: The Tribunal noted that the penalties were imposed on the appellant for availing inadmissible Cenvat credit with a malafide intention. However, given the divergent views of various judicial pronouncements and the fact that the issue was debatable, the Tribunal held that the allegation of suppression of facts was not sustainable. Consequently, the penalties imposed on the appellant were set aside. Judgment: The Tribunal held that on merits, the appellants were not entitled to avail Cenvat credit on prefabricated buildings/shelters in light of the decision of the Hon’ble Bombay High Court in Bharti Airtel Ltd. However, the extended period of limitation was not invokable, and the penalties imposed on the appellants were set aside. The demands within the normal period of limitation along with interest were upheld. The appeals were disposed of accordingly.
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