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TMI Blog2017 (12) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... shown - if the issue of availment of cenvat credit was in dispute upto the level of this Tribunal, in that circumstances, the allegation of suppression or concealment of fact/mis-statement is not sustainable - extended period not invokable - penalty also set aside. Demand along with interest within period of limitation is confirmed - appeal allowed in part. - ST/1032/2010 - A/62105/2017-CU[DB] - Dated:- 30-11-2017 - Mr. Ashok Jindal, Member (Judicial) And Mr. Devender Singh, Member (Technical) Shri. Amrinder Singh, Advocate- for the appellant Shri. V.K. Tehran, AR- for the respondent ORDER Per: Ashok Jindal The appellant is in appeal against the impugned order wherein the cenvat credit on towers, shelters prefabricated building etc. of ₹ 5,88,13,400/-has been denied. Consequently, the duty was demanded along with interest and equivalent amount of penalty has been imposed. Aggrieved from the said order, the appellant is before us. 2. The ld. Counsel for the appellant submits that the appellant is engaged in providing Telecommunication Services and availed cenvat credit of the duty paid on towers, tower materials, shelters pre-fabricated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case in hand, investigation was started in the year, 2006 and the appellant did not provide the required details in time and when all the details have been supplied by the appellants, the show cause notice was issued to the appellant immediately. Therefore, the extended period of limitation is rightly invoked, as the appellant has suppressed the details of availment of cenvat credit from the department. 5. Heard the parties and considered the submissions. 6. After hearing both the sides, we find that the following issues emerge for the arguments advanced by both the sides. (A) Whether the appellant is entitled to avail cenvat credit of duty paid on towers material, shelters pre-fabricated buildings etc. or not? (B) Whether in the facts and circumstances of the case, the extended period of limitation is invocable or not? (C) Whether the penalty is imposable on the appellant or not? Issue No. 1: As the Larger Bench of this Tribunal in the case of BSNL and others (supra) has held that cenvat credit is not available on the above said items, as they have become immovable property and has affixed to the earth. Therefore, relying on the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the Revenue that the income received by the passive infrastructure providers is exigible to tax under the 2005 Act. The case of the Revenue is that there was a misuse of C forms and that the incorporation and use for provision of the passive telecommunication infrastructure (of goods procured through inter-state tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. (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. The appellant is a service provider of port. We need not go into this question as to whether the appellant is a factory or manufacturer or service provider in view of that fact that it is not disputed by mr. Y.N. Ravani, learned counsel appearing for the Revenue in this Tax Appeal that the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation 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 three was any legislative intent to clarify any existing provision. For the same reason, as mentioned above, the decision of the Apex Court in Sangam Spinners Limited Vs. Union of India and others, reported in 2011 (11) SCC 408 = 2011-TIOL-31-SC-CX would not be applicable to the facts of the instant case. 9. Mr. Ravani has also vehemently urged that since jetty was constructed by the appellant through the contractor and constructi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellants 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 nowhere it is disputed by any of the parties that the tower/BTS cabins were not used by the appellant for providing service namely 'Business Auxiliary Service'. Therefore, the Cenvat Credit cannot be denied. These facts have not been appreciated by the adjudicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... providing passive telecom infrastructure service. 7.14. In the light of above cited decisions of GTL Infrastructure Ltd. (Supra) and Reliance Infratel ltd. (Supra) we hold that post 2006 appellants are providing passive telephone infrastructural and paying service tax categorically of Business Auxiliary services or Business Support services. Therefore, the appellant are entitled to take Cenvat Credit on towers, portable shelters and accessories thereof as per the definition of Rule 2(k)(2) of Cenvat Credit Rules, 2004 as they are providing output services that is Business Auxiliary Services or Business Support 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 shelt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lters / 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. 13. With these terms appeals are disposed of. The Misc applications also stands disposed of in the above terms. 14. I have carefully and appreciating perused the judgment authored by my Ld. Brother. The order portion of the judgment (para-12) is reproduced below: 12. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be goods. This view/finding of the High Cort is not an off the cuff remark or a mere obiter dictum. The said finding is directly germane to the issue and is the distillate of a rational reasoned and detailed analysis of the facts and circumstances and the judicial precedents. The High Court's view/finding that the towers are not goods is independent of their classification. In other words, the said view/finding is not dependent on or influenced by any classification considerations. Similarly, the said view/finding is independent of the output service in relation to which they are uses. Thus the said view/finding is a clear, unambiguous, and reasoned 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lecom services and in the case of Reliance Infratel also, these towers were shared by the owners thereof with the other telecom companies which also provided the same service nothwithstanding the fact that in that process, the service rendered by the tower owners to the other telecom service providers has been considered to fall under B.S.S. Further it no way diminishes the analysis, reasoning and ratio of the Bombay High Court Judgement in case of Bharti Airtel. Even if the Bharti Airtel Judgment is applied in its most restricted manner in the wake of the above quoted remark of the High Court, it is undeniable that the said judgment, even in its narrowest sense has 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the extended period of limitation is not invocable. Further, in the case of Vodafone Essar Mobile Services Ltd (Supra) although, on merits, the cenvat credit was denied but it was held by this Tribunal the extended period of limitation is not invocable. Further in the case of Vodafone Essar South Ltd. (Supra), this Tribunal held that the appellant is not entitled to avail cenvat credit on the items in question but it was held that the extended period of limitation is not invocable and no penalty is imposable. 7. The sole arguments of the Ld. AR is that the appellant had not provided the details in time, therefore, the appellant is not entitled to avail cenvat credit. 8. In fact, availment of cenvat credit was in the knowledge of the department as the appellant was filling their service tax returns in time and availment of cenvat credt was shown. If the appellant has not provided the details, no one has preventive by the Revenue to issue the show cause notice to deny the whole of the cenvat credit to them. The revenue cannot take the excuse that the details were not supplied, therefore, the extended period of limitation is invocable. 9. In fact, on merits, if th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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