2024 (2) TMI 371 - AT - Service Tax

Recovery of CENVAT Credit alongwith interest and penalty - input or not - pre-fabricated building green house shelter - case of Revenue is that pre-fabricated building green house shelter does not appear either to be contained in or consumed for providing the output service that the appellant were alleged to have wrongly availed the utilised Cenvat credit of said service tax - HELD THAT - In the present case, it is not at all in dispute that the appellant is engaged in setting up of positive infrastructure and provision of such structure to various telephone companies. The said positive infrastructure that is the tower, shelter etc. is created out of MS angles, and channels which used to be brought to the site in CKD condition and with the help of nuts and bolts were got assembled and erected as towers and shelters on the site after being fabricated and erected these structures were got fastened to the earth. There is no denial to the fact that the products brought in CKD condition were the excisable commodity when these admitted facts are glanced in light of above definition of Section 3 of Transfer of Property Act, it is clear that the tower or shelter erected with the help of nut and bolts to a foundation on earth to provide stability and functionality does not qualify to mean attached to the earth . There are no no reason to accept the findings of the order under challenge with the irrespective that some other party is before Hon ble Supreme Court on the same issue, especially when there is no stay of order in that case by the Supreme Court - it is held that goods in question, the pre-fabricated shelter is not immovable property but is the Capital Good for which the appellant is entitled to take credit of duty paid. The order under challenge is hereby set aside - Appeal allowed.

Summary

Issues involved:
The issues involved in this case are the eligibility of the appellant to avail Cenvat credit on "pre-fabricated building green house shelter" and whether such structure qualifies as immovable property for the purpose of availing Cenvat credit.

Issue 1: Eligibility of Cenvat credit on "pre-fabricated building green house shelter"

The appellant, engaged in providing tele-communication services, was alleged to have wrongly availed the utilized Cenvat credit of service tax paid for the "pre-fabricated building green house shelter". The department contended that the structure was fixed to the earth and therefore not eligible for Cenvat credit. The appellant argued that the item in question was immovable goods received in CKD condition and excise duty had been paid on these items. They cited legal precedents to support their claim that the shelter was rightly considered as an input necessary for providing the output service. The Tribunal observed that the structure, though fastened to the earth, did not qualify as "attached to the earth" as per legal definitions. The Tribunal referred to previous court decisions to support the appellant's claim that the shelter should be considered as a capital good, making the appellant eligible for Cenvat credit.

Issue 2: Classification of "pre-fabricated building green house shelter" as immovable property

The department argued that the shelter, being fastened to the earth, should be classified as immovable property and hence not eligible for Cenvat credit. However, the Tribunal disagreed, stating that the shelter did not meet the criteria of being permanently fastened to the earth to qualify as immovable property. Referring to previous court decisions, the Tribunal established that the shelter, even when fastened to the earth, remained a capital good and not immovable property. The Tribunal held that the shelter was essential for the appellant's service provision and therefore eligible for Cenvat credit.

Conclusion:
The Tribunal ruled in favor of the appellant, holding that the "pre-fabricated building green house shelter" was not immovable property but a capital good, making the appellant entitled to take credit of duty paid. The order under challenge was set aside, and the appeal was allowed.