2018 (7) TMI 1380 - AT - Service Tax

CENVAT Credit - capital goods - tower materials - Held that - The issue on merit regarding the cenvat credit entitlement on tower material under the category of capital goods has been settled against the assessee. The reversal of cenvat credit is to be upheld - the penalties also are liable to be set aside only subject to the appellant also paying the interest involved in such delay - appeal disposed off.

Summary

Issues Involved:
Cenvat credit on tower materials, reversal of cenvat credit, imposition of penalties, payment of interest on cenvat credit.

Analysis:
The Appeals before the Appellate Tribunal CESTAT New Delhi involved the issue of cenvat credit on tower materials. The appellant, engaged in providing telecommunication services, availed cenvat credit under the category of capital goods on various tower materials used for the service. The Department contended that the appellant was not entitled to this credit, leading to the reversal of the cenvat credit after Show Cause Notices were issued, along with the imposition of penalties by the Adjudicating Authority. The Appeals were filed against these decisions, and both were being disposed of in a common order.

The Ld. Advocate for the appellant acknowledged that the issue of cenvat credit on tower materials had been decided against the assessee on merit. However, he highlighted that the entire credit had been reversed by the appellant. He requested the set-aside of the penalties imposed. Reference was made to a previous order by the Regional Bench Chandigarh involving the same appellant, where the Tribunal upheld the reversal of cenvat credit but set aside the penalties. On the other hand, the Ld. DR raised a concern regarding the payment of interest related to availing the cenvat credit.

After hearing both sides and examining the record, the Tribunal noted that the issue of cenvat credit entitlement on tower material under the category of capital goods had been settled against the assessee. Referring to previous decisions, including one by the Hon'ble High Court of Bombay and a Larger Bench of the Tribunal, it was established that the appellant could not avail cenvat credit on tower and shelter used for telecommunication services. Consequently, the Tribunal upheld the reversal of cenvat credit and set aside the penalties, as no malafides were found attributable to the appellant.

In line with the Tribunal's decision, the reversal of cenvat credit was upheld, and the penalties were set aside, subject to the condition that the appellant pays the interest involved in the delay. The Appeals were disposed of accordingly, following the Order of the Tribunal and the legal precedents cited.

This comprehensive analysis of the judgment highlights the key issues, arguments presented, legal precedents relied upon, and the final decision rendered by the Appellate Tribunal CESTAT New Delhi regarding the cenvat credit on tower materials.