2024 (9) TMI 383 - HC - Central Excise

CENVAT Credit - Towers and parts of accessories of towers falling under Chapter 73 of the Central Excise Tariff Act, 1985 - denial on the ground that towers were not capital goods as defined under Rule 2 (A) of the said Rules - Jurisdiction - denial also on the ground that BSNL, Eastern Telecom Region and BSNL Eastern Telecom Project provide IUC service and undertook various project related jobs for all the BSNL branches of Eastern India. Denial on the ground that towers were not capital goods as defined under Rule 2 (A) of the said Rules - HELD THAT - The Tribunal after going through the factual position found that adjudicating authority has given a clear finding that towers and parts and accessories of towers were goods on which Central Excise Duty has been paid by considering them as excisable goods. Further a provider of all output service is eligible for availing credit on duty of excise and service tax paid on capital goods, input and input service, towers and parts and accessories of towers. In addition, providing of output service, the other factual findings referred to by the adjudicating authority was re-examined and the learned tribunal affirmed the view taken by the Commissioner and held that the Commissioner had rightly dropped the demand in the show-cause. Denial also on the ground that BSNL, Eastern Telecom Region and BSNL Eastern Telecom Project provide IUC service and undertook various project related jobs for all the BSNL branches of Eastern India - HELD THAT - The issue was taken up for consideration and the tribunal examined the facts and agreed with a view taken by the Commissioner for dropping the proposal in the show-cause notice not stopping with that the tribunal went further to examine the facts and that the assessee had satisfied the so-called contentions for availing the credit and, therefore, held that the CENVAT credit cannot be denied on account of procedural lapse, if any. Thus, it is found that the matter being entirely factual and no question of law much less substantial question of law arises for consideration in this appeal. Appeal dismissed.

Summary

Issues:
Delay in filing the appeal, admissibility of credit on towers and accessories under Central Excise Act, 1985, eligibility for CENVAT credit, procedural lapses in availing credit, jurisdiction of the Tribunal, factual findings, and appeal outcome.

Analysis:
The High Court of Calcutta addressed the delay in filing the appeal, noting the reasons provided in the affidavit and exercising discretion in favor of the appellant department to condone the delay. The appeal under Section 35G of the Central Excise Act, 1944, was against the order of the Tribunal regarding the admissibility of credit on towers and accessories. The show-cause notice raised concerns about the credit availed by the respondent, alleging that the towers and accessories did not qualify as capital goods or inputs under the CENVAT Credit Rules. The Commissioner had dropped the demand raised in the notice, leading to the revenue's appeal before the Tribunal.

The Tribunal reviewed the factual position and affirmed the Commissioner's decision to drop the demand. It concluded that the towers and accessories were excisable goods on which duty had been paid, making the provider of output services eligible for availing credit. The Tribunal also examined the issue of procedural lapses in availing credit and agreed that the CENVAT credit could not be denied solely on procedural grounds. Additionally, it found that the assessee had met the requirements for availing credit, even if the towers were not installed on their premises.

The High Court observed that the matter was primarily factual, with no substantial question of law requiring consideration. Consequently, the appeal was dismissed, upholding the Tribunal's decision. The Court found no merit in the department's allegations and affirmed the Tribunal's findings regarding the admissibility of credit and the eligibility of the assessee for CENVAT credit. The application was also dismissed in line with the appeal outcome.