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TMI Blog2024 (10) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... erral Bench, is contrary to the decision of Hon ble High Court in the matter of Bharti Airtel. Accordingly, the said Bench referred the matter to the Hon ble President of the Tribunal for constitution of larger Bench to consider the issue. The referral Bench has referred the issue to the Larger Bench because according to them the issue about admissibility of Cenvat Credit in respect of input services used for erection and commissioning of Telecom Towers by the Telecom Service providers have been decided by various Benches of the Tribunal without examining the issue in the light of the definition of input service under Rule 2(l) of Cenvat Credit Rules, 2004 as well as the decision of the Hon ble Bombay High Court in the matter of Bharti Airtel. As per the referral Bench the Hon ble High Court while deciding the issue about admissibility of Cenvat Credit against the assessee therein, did not make any distinction in respect of inputs and input services - It also observed that the services in respect of which the Cenvat credit has been claimed are not for providing the output services but have been used for commissioning and erection of telecom towers, which have been held by the Hon b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h these goods on which Cenvat Credit has been availed have not been used to provide the output service and the input services which have been utilized for erection, commissioning and installation of these BTS Towers also inadmissible as these are relation to installation of such towers and accordingly three show cause notices dated 29.9.2010 for the period April, 2005 to September, 2009, 21.4.2011 for the period October, 2009 to September, 2010 and 19.4.2012 for the period October, 2010 to September, 2011 respectively were issued to the appellants seeking to disallow the credit taken by them alongwith interest and penalties. The learned Commissioner vide common adjudication order i.e. Order-in-Order dated 23.6.2015 while disallowing the CENVAT credit taken by the appellant confirmed the demand alongwith with interest and penalty. 3. This appeal was heard earlier also by this Tribunal, when vide order dated 28.6.2019 the Bench referred the issue to the Larger Bench while taking note of the decision of the Hon ble High Court of Judicature at Bombay in the matter of Bharti Airtel (supra) where the issue of admissibility of Cenvat Credit in respect of input used for erecting and commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im order in the instant appeal, which are as under:- 2. It would, thus, appear that the referral bench was concerned that four decisions on eligibility of the impugned input service before it were, in its opinion, not in accord with Bharti Airtel Ltd, which, though rendered in dispute over eligibility of inputs , should nonetheless, for having arisen from the same impugned activity and owing to 4.6 ..the CENVAT chain is broken the moment it is admitted that these services have been used for erection and commissioning of the immovable property. The reason and logic applied by the High Court for denying the credit in respect of the inputs used for telecom towers and shelter will apply on equal footing to the input services used in the same process have been and, therefore, to be declared as not binding. In view of this limited remit, our tarrying over the facts and circumstances need not be overstretched beyond the bare essentials and only for the purpose of the context. The appellant provides telecommunication service through their transmission network by deploying equipment comprising base transceiver station (BTS) , antennas and connector that were erected and commissioned on thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service has merged into structures that, one way or other, are outside the ambit of central excise law as held in Bharti Airtel Ltd and, hence, ineligible. That the brooding presence of a central excise dispute, of yore and over exigibility of on site fabrication of goods to duties chargeable on manufacture, continues to haunt the altered paradigm of indirect tax is, according to the appellant, testimony to unwarranted influence of legacy. That whittling away at the delineation of sources of credit, in CENVAT Credit Rules, 2004, by insinuating the decision on input in Bharti Airtel Ltd into this dispute over input service is, in the contention on behalf of the appellant, deliberate erosion of principle of non-equivalence of the two levies and, therefore, untenable in law. A brief foray into the legacy and the distinguishment of the permitted sources may assist in resolution of reference. xxx xxx xxx 7. Considering the period of dispute, it is also significant that definitions of the three sources capital goods , input and input services set out thus 3. CENVAT credit: -(1) A manufacturer or producer of final products or a provider of taxable service shall be allowed to take credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nput and input service , in rule 2(k) and 2(l) of CENVAT Credit Rules, 2004 respectively, leaves no room for doubt that the two stood on entirely different foundations that did not lend itself to adaptation in the manner opined by the referral bench. He also contended that the narration of common arguments on behalf of the assessee in both appeals dealt with in Bharti Airtel Ltd could cause inference, and erroneously so, that denial of credit had been proposed in the notices owing to usage in immovable property whereas the assessee therein had merely responded to an alternative finding in the adjudication order that decided the second notice. He submitted that it was in such consequential conceptual commotion alone that the four decisions cited on behalf of the appellant herein were opined to be not germane. xxx xxx xxx 15. Rule 3 of CENVAT Credit Rules, 2004, which governs the core of the scheme, is unambiguous on eligibility of the two classes of assessees, viz., under Central Excise Act, 1944 and Finance Act, 1994, for taking credit of duty/tax liability borne by them on procurement of capital goods and input from manufacturers and of input service from providers of service. As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ariff items in the definition. That the elaborate findings which disallowed entitlement to credit of duty paid on inputs deployed in connection with immovable property which telecommunication equipment eligible for credit as capital goods - were mounted on or housed in for convenience and protection was not intended for wider applicability is abundantly clear from 33 ..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 Bharti Airtel Ltd and is relevant as precedent only in the specific context of inputs that, by merging into non- excisable immovable property , fail to conform to the essentiality of goods which is the threshold qualification for capital goods in rule 2(a) and input in rule 2(k) of CENVAT Credit Rules, 2004. The referral bench did not appear to have considered this aspect of Bharti Airtel Ltd. 19. The present dispute is about input service which, unlike input that, insofar as provider of service is concerned, earns eligibility by being used for providing any output service , earns eligibility from used by a provider of taxable service for provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e capital goods and wrongly claimed, in the alternative, to be input and does not cast its shadow as break in CENVAT chain in all circumstances. 7. The referral Bench has referred the issue to the Larger Bench because according to them the issue about admissibility of Cenvat Credit in respect of input services used for erection and commissioning of Telecom Towers by the Telecom Service providers have been decided by various Benches of the Tribunal without examining the issue in the light of the definition of input service under Rule 2(l) of Cenvat Credit Rules, 2004 as well as the decision of the Hon ble Bombay High Court in the matter of Bharti Airtel (supra). As per the referral Bench the Hon ble High Court while deciding the issue about admissibility of Cenvat Credit against the assessee therein, did not make any distinction in respect of inputs and input services. It also observed that the services in respect of which the Cenvat credit has been claimed are not for providing the output services but have been used for commissioning and erection of telecom towers, which have been held by the Hon ble High Court as immovable property, not goods and thus the Cenvat chain is broken th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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