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TMI Blog2017 (9) TMI 157X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 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. - Appeal No. ST/398-399/2008 - Final Order No. 61719-61720/2017 - Dated:- 18-5-2017 - Mr. Devender Singh, Member ( Technical ) For the Appellant : Shri Amarinder Singh, Advocate For the Respondent : Shri Tarun Kumar, AR ORDER Per : Devender Singh Since both appeals pertain to the same issue, they are being taken up together. 2. The brief facts of the case are that the duty of ₹ 29,33,396/- and ₹ 11,81,895/- were demanded for recovery of Cenvat credit on the ground that the Cenvat credit availed on prefabricated buildings/shelters was not admissible and the same was disallowed. The adjudicating authority confirmed the above demand, along with interest and imposed penalty of equivalent amount on the appellant. 3. Learned Counsel for the appellant submits that the appellant is engaged in the providing telecommunication service and availed Cenvat credit of duty on prefabricated buildings/shelters during September, 2004 to Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. All the appeals are disposed of as above. No costs however. Therefore, relying on the decision of the Larger Bench of this Tribunal which has been followed by this Tribunal in the case of Vodafone Essar Mobile Services Ltd. reported in 2016- TIOL -2648-CESTAT, Delhi and Vodafone Essar South Ltd. reported in 2017-TIOL-2254-CESTAT, Allahabad, I hold that the appellant is not entitled to avail the cenvat credit on the items in question. 9. The contention of the learned Advocate that the matter is covered by the judgement of Bellsonica Auto Components India P.Ltd. (supra) is not tenable because the question under consideration in the said judgement was completely different, namely, whether the input service credit paid on civil construction service was admissible for setting up factory and whether civil construction is an input service under Rule 2(i) of Cenvat Credit Rules, 2004 and whether such service has been used for manufacture of final products. Besides, the judgement of Bellsonica Auto Components India P.Ltd., has been distinguished in the said judgement of the Larger Bench. Hence, the ratio of the said case is not applicable in the present set of facts. The appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat a part of it where beneficiary party fixed its antenna would becomes goods. Even if other equipments are located near tower are held to be goods wherein Hon ble High Court held as under: The issue in the present batch of cases, in the factual context of the Registration certificate issued and the nature of the petitioner s business, is whether goods purchased by the petitioner / dealers (for the purposes of building, operating and maintaining passive telecom infrastructure and where on the towers erected and maintained but nonetheless continued to be owned by the petitioner the passive infrastructure provider; goods which are indisputably integrally associated with the building and maintenance of the cell towers), are goods falling within the ambit of Section 8(1) read with the provisions of Section 8(3)(b) of the CST Act, and thus exigible only at the concessional rate of tax provided in Section 8(1). 21. Further the Hon ble High Court observed as under: The BSNL ruling that telecommunication tower is immovable property may not be of direct relevance to the issue on hand in the present lists as the impugned orders of penalty are not predicted on a premise by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Andhra Pradesh in the case of Indus Towers Ltd. (Supra) is having a bearing in the case of Bharti Airtel Ltd. (Supra). 7.6 We further observed that an issue for availment of Cenvat Credit came up before the Hon ble High Court of Gujarat in the case of Mundra Ports Special Economic Zones Ltd. (supra). 7.7. The issue before the Hon ble High Court is given as under: Whether on the facts and in the circumstances of the case, the Tribunal was justified in law in rejecting the claim of the assessee in light of the provisions of Rule 2(k) of the Cenvat Credit Rules, 2004 7.8. In the said case Hon ble High Court has observed in para 7, 8 and 9 as under: 7. it is not disputed that jetty was constructed and input credit was claimed on cement and steel. The aforesaid definition of Rule 2(k) was applicable and Explanation 2 did not provide that cement and steel would not be eligile for input credit. According to learned consel for the appelant, the appellant is not manufacturer and, therefore, the provisions Explanation 2 of Rule 2(k) would be applicable only to the factory and manufacturer. The appellant is neither having any factory nor he is manfuacturer. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DEL-LB. we have carefully gone thorugh the decision of the Larger Bench of the Tribunal. We do not find that amendment made in Cenvat Credit Rules, 204 which come into force on 07.07.2009 was clarificatory amendment as there is nothign to suggest in the amendming Act that amendment made in Explanation 2 was clarificatoryin nature. Whereever the legislature wants to clarify the provision, it clearly mentions intention in the notification itself and seeks to clarify existing provision. Even, if the new provision is added then it will be new amendment and cannot be treated to be clarification of particular thing or goods and/orinput and as such, the amendment could operate only prospectivley. In our opinion, the view taken by the Tribunal is based onconsjectures and surmises as the Larger Bench of the Tribunal used the expression that intention behind amnedment was to clarify. The coverage under the input from where this intention has been gathered by the Tribunal has not been mentioned in the judgement. There is no material to support that thre was any legislative intent to clarify any existing provision. For the same reason, as mentioned above, the decision of the Apex Court inSanga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -2013 (129) STR 401 (Tri-Mum) of this Tribunal and thereafter this Tribunal analyzed this issue and observed in para 8 9 as under: 8. On going through the above said provision of Rule 2(k)(i) ibid we find it deals with manufacturing activity. Admittedly, the appellants are providing output service, therefore, Rule2(K)(ii)ibid is relevant to the facts of the case in hand, wherein it has been said that all goods, except light diesel oil, high speed diesel oil, motor spirit, commonly known as petrol and motor vehicles, used for providing any output service. The adjudicating authority has heavily relied on Explanation-2 to the said Rules as same has been discussed by the Tribunal in the case of Bharati Airtel Ltd. (supra). In fact, the explanation also clarified that inputs includes goods used in manufacture of capital goods which are further used in the factory of the manufacture. But in the case in hand, the appellant is a service provider. Therefore, the said explanations have no relevance to the facts of this case. As per Rule 2(k)(ii) of the Cenvat Credit Rules, 2004 all goods are entitled for cenvat credit which are used for providing any output service. In this case nowh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Business Auxiliary Service in the facts of the case. 7.12. Again this Tribunal in the case of Reliance Infratel ltd. (Supra) further observed in para 8 as under: 8. It is crucial to note that the High Court restricted its conclusion to the facts and circumstances which fell for their consideration. To quote from the last para 33 of the judgment, Hon ble High Court said that in any case towers and PFB are in the nature of immovable goods and are non-marketable and non-excisable. If this be the position then towers and parts thereof cannot be classified as inputs so as to fall within the definition of Rule 2(k) of the Credit Rules. We clarify that we are not deciding any wider question but restricting our conclusion to the facts and circumstances which have fell for our consideration in these appeals. In view of the clear finding of the High Court it is necessary to see facts in the present case. The facts in the present case are essentially different. In the present case the output service is Business Support Service and not Telecommunication Service. The show cause notice itself states that appellant are paying Service Tax on Business Support Service. The appellant in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Services and there is no restriction for availing Cenvat Credit on inputs namely tower and parts thereof on which duty has been paid by the supplier. 8. Further, we find that in the case of Bharti Airtel Ltd. in appeal No. ST/777/2009 wherein supplier of the goods have classified these shelters / towers under chapter 85 of the Central Excise Act Tariff 1985 and paid duty thereon as capital goods and same has been accepted by the Revenue. In these circumstances, we hold that in the said appeal, the appellant is entitled to take Cenvat Credit on towers and shelters to the tune of R.2,59,95,327/- as capital goods . 9. We also find that the issue of availment of Cenvat Credit on the items in question is still in dispute as there are conflicting decisions of the Hon ble Bombay High Court in the case of Bharti Airtel Ltd. (Supra) and of Hon ble High Court of Gujarat in the case of Mundra Ports Special Economic Zones Ltd. (Supra). Moreover, first time the issue was decided against the appellant by this Tribunal on 06.01.2012 in the case of Bharti Airtel Ltd. (Supra). Therefore, the allegation of suppression of fact is not sustainable. Consequently, the extended period of lim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In view of the above observation the following order has been passed: a) On merits, the appellants have no case in the light of the decision of Bharti Airtel Ltd (Supra) of Hon ble High Court of Bombay. b) Post 2006, wherever the appellant are paying service tax under the category of Business Auxiliary Services or Business Support Services for providing passive infrastructure, the appellants are entitled to take Cenvat Credit on towers, pre fabricated shelters parts thereon, etc. c) In appeal no. ST/777/2009, the appellant is entitled to take Cenvat Credit to the tune of ₹ 2,59,95,327/- on shelters / parts as capital goods wherein the supplier has paid Excise duty on these items by classifying under Chapter 85 of the Central Excise Tariff Act 1985. d) The extended period of limitation is not invokable. Therefore, the demands beyond the normal period of limitation are set aside. e) Penalties imposed on the appellants are set aside. 15. The issue involved in these appeal is whether cenvat credit on telecom towers and pre-fabricated building and parts thereof is admissible. 16. I fully agree with para 12(a) of my Ld. Brother s order that on m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and ratio based view/finding on the basis of which Cenvat Credit on towers. PFB and parts thereof was denied because when these are not goods then they cannot be capital goods or inputs. The reasoning, analysis and ratio of the Bombay High Court and the consequence thereof (that when the towers are not goods then they cannot be capital goods or inputs) is thus directly applicable even in cases where the towers are shared by other telecom companies to provide telecom services. Merely fact that the owner of such a tower allows some other company to use it for providing telecom service in no way diminishes the validity and strength of the reasoning ratio, view/finding of Bombay High Court that such towers are not goods. Further, once Mumbai High Court has concluded after a reasoned and rational analysis that towers are immovable property and not goods, they cannot become moveable, property/goods merely because they are differently classified by some or are shared by some telecom operations (other than their (i.e. towers) owners) to provide telecom service or even some other service. Thus I have no doubt in my mind that the order contained in para12(b) and 12 (c) quoted above is in con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unequivocally arrived at a reasoned and rational finding that towers are immovable property and not goods and if towers are immovable property and not goods in the context of the case of Bharti Airtel, they cannot by any stretch be held to be movable property/goods in the context of Reliance Infratel merely because they were also shared by other telecom service providers, it is more so because, as stated earlier, the analysis reasoning and ratio based on which the High Court came to the view/finding that towers are not goods was independent of their classification and or the output service they were used in relation to. 19. In view of the foregoing, I am of the firm view that the CESTAT judgement in case of Reliance Infratel does violence to the reasoning, ratio and finding of the judgement of Bombay High Court in the case of Bharti Airtel and is not in conformity therewith. Therefore, CESTAT judgement in the case of Reliance Infratel (Supra) has no value as a precedent. 20. In addition to what is stated above, I may also observe that once telecom towers, PFB and parts thereof are held to be ineligible for credit by Bombay High Court in the case of Bharti Airtel (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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