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TMI Blog2025 (2) TMI 559X X X X Extracts X X X X X X X X Extracts X X X X ..... ries of capital goods falling in terms of Rule 2(a)(A) of the CENVAT Credit Rules, 2004. These Power Transmission lines cannot be erected without transmission towers; the transmission towers, hence, are the necessary component of Power Transmission Line and thus the same are to be treated as the components or accessories of the capital goods falling under clause (i) of the Rule 2(a)(A) of the CENVAT Credit Rules, 2004; as per clause (iii), the components, spares and accessories of the goods specified at clause (i) and (ii) of Rule 2(a)(A) of the Rules are eligible as capital goods - the transmission towers are eligible capital goods in terms of clause (iii) of Rule 2(a) (A) of the CENVAT Credit Rules, 2004 and the CENVAT Credit of duty of Rs.90,44,256/- has correctly been correctly availed by the Appellant in respect of such goods. This issue is no more res integra as an identical issue has already been examined in the case of M/s. Bharti Airtel Ltd. v. Commissioner of Central Excise, Pune [2024 (11) TMI 1042 - SUPREME COURT] wherein the Hon'ble Apex Court has allowed the credit in respect of similar items/goods holding the same as components/accessories of capital goods falling u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xtended period of limitation - HELD THAT:- The issues involved in the present appeal were subject matters of litigation before various legal fora. Further, the Department has not brought in any evidence to establish the allegation of suppression with intention to evade tax on the part of the Appellant. In these circumstances, the invocation of extended period of limitation is not sustainable. Therefore, the Appellant succeeds on merits as well as on limitation.
Levy of penalties - HELD THAT:- The penalties are not imposable on the Appellant. Accordingly, the penalties imposed are set aside.
Conclusion - i) The denial of CENVAT Credit for items listed as capital goods and input services was set aside. ii) The Appellant was required to reverse specific amounts of credit they agreed to, but the remaining credit was deemed eligible. iii) The demand raised by invoking the extended period of limitation was set aside, and no penalties were imposed.
Appeal disposed off. X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.1. Regarding the denial of CENVAT Credit amounting to Rs.90,44,256/- availed on "Electrical Transmission Tower Materials" (as per Sl. No. 1 of the above Table), the Appellant has submitted that the Power Transmission line requires High Tension electric cable and other electric components such as Transformers, Conductor and Circuit Breaker which fall under Chapter 85 of the Central Excise Tariff Act, 1985 and they are eligible to avail the credit of the 'capital goods' vide Rule 2(a)(A)(i) of the CENVAT Credit Rules, 2004. The appellant submits that these Power Transmission lines cannot be erected without transmission towers; the transmission towers, hence, are the necessary component of Power Transmission Line and thus the same are to be treated as the components or accessories of the capital goods falling under clause(i) of the Rule 2(a)(A) of the CENVAT Credit Rules, 2004; as per clause (iii), the components, spares and accessories of the goods specified at clause (i) and (ii) of Rule 2(a)(A) of the Rules are eligible as capital goods. The submission of the appellant is that the goods falling under clause (iii) may be classifiable under any Chapter Tariff Heading and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e hospitalization expenses of the employees and their family members as per the company's policy of the 'Corporate Social Responsibility'; premium for this policy is paid by the company and the same is not recovered from the salary of employees. It is also submitted by the Appellant that such insurance is equally important as the port package polity and squarely falls under the inclusive definition of "input" used in connection with a business activity. Hence, the credit of service tax in respect of the premium paid for the mediclaim policy / health insurance covering employees and their family members, have correctly been availed. 4.1. Reliance in this regard is placed on the decision of the Tribunal in the case of M/s. Indian Bank v. Commissioner of Service Tax, Kolkata [2023 (9) TMI 569 - CESTAT, Kolkata] (Final Order No. 76603 of 2023 dated 06.09.2023 in Service Tax Appeal No. 39 of 2010 - CESTAT, Kolkata). Submissions regarding Sl. No(s). 5 to 11: 5. Regarding denial of CENVAT Credit of Rs. 30,47,710/- on "Consultancy for construction of railway line" (Sl. No. 6 of the above Table), it is their claim that Railway connectivity is an integral part of the port project ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of such activities as referred to above are eligible input services in terms of Rule 2(l) of the CENVAT Credit Rules, 2004 and the credit of Service Tax thereon has been rightly availed. To support this contention, the Appellant has cited the decision of the Hon'ble Punjab and Haryana High Court in the case of Commissioner of Central Excise, Delhi-III v. M/s. Maruti Suzuki India Ltd. [2023 (11) TMI 724 - P&H]. Submissions regarding Sl. No(s). 12 and 13: 6. With regard to the allegation of excess credit availed to the tune of Rs.45,354/- on the ground that original bills are not traceable but the copies of such invoices are available on records, the Appellant submits that the Show Cause Notice has raised the query similar to the Audit Memo without considering the submissions and agreement to reverse the credit of Rs.37,714/-; thus, it is their contention that the above objection has no basis. Towards the balance amount of Rs.7,640/-, they submit that original bills are available which can be produced by the Appellant. In this regard, they have relied upon the judgment of the Hon'ble Punjab & Haryana High Court in the case of M/s. Maruti Udyog Ltd. [2009-TIOL-440-HC-P&H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We observe that these items have been used by the Appellant in relation to transmission of electricity through Power Transmission Lines and thus the same are to be treated as components or accessories of capital goods falling in terms of Rule 2(a)(A) of the CENVAT Credit Rules, 2004. These Power Transmission lines cannot be erected without transmission towers; the transmission towers, hence, are the necessary component of Power Transmission Line and thus the same are to be treated as the components or accessories of the capital goods falling under clause (i) of the Rule 2(a)(A) of the CENVAT Credit Rules, 2004; as per clause (iii), the components, spares and accessories of the goods specified at clause (i) and (ii) of Rule 2(a)(A) of the Rules are eligible as capital goods. We agree with the submission of the Appellant that the goods falling under clause (iii) may be classifiable under any Chapter Tariff Heading and not necessarily under the Chapters mentioned in clause (i) of the above Rule. Accordingly, we hold that the transmission towers are eligible capital goods in terms of clause (iii) of Rule 2(a) (A) of the CENVAT Credit Rules, 2004 and the CENVAT Credit of duty of Rs.90, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n also be considered as accessories to the antenna and BTS which are "capital goods" falling under Chapter 85 of the Schedule to the Central Excise Tariff. ......................... 11.11.11 There is no dispute to the fact that BTS is a composite system consisting of the transmitter, receiver, antenna and other equipment, and antenna can be said to be an integral part of BTS. As discussed above, and not disputed by the Revenue, tower is needed to keep the antenna at an appropriate height and keep it stable. Without the tower, it is not possible to hoist the antenna at the requisite height and without it being securely fastened to the tower, antenna cannot be kept firm and steady for proper receipt and transmission of radio signals. Thus, there cannot be any doubt that a mobile tower can be treated to be an accessory of antenna and BTS. Accordingly, since in terms of subclause (iii) of Rule 2(a)(A), all components, spares and accessories of such capital goods falling under sub-clause (i) would also be treated as capital goods, a mobile tower can also be treated as "capital good". 11.11.12 We, therefore, agree with the conclusion arrived at by the Delhi High Court that towers a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elying the decision of the Larger Bench of this Tribunal in the case of Reliance Industries Limited (supra), we hold that the appellant is entitled to take the cenvat credit on medical insurance premium made by the appellant in their employees." 11.1. By relying on the decision cited supra, we hold that the denial of credit in respect of "Health Insurance of staff and family" vide the impugned order is not sustainable. Accordingly, we set aside the disallowance of credit in respect of "Health Insurance of staff and family" in the impugned order. 12. We have also examined the contentions of the Appellant with regard to the services listed at Sl. No(s) 5 to 11 of the Table at paragraph 3 (supra), viz.: a. Port Insurance b. Consultancy for construction of railway line c. Supervision charges for construction of Electrical Transmission Towers d. House Keeping services e. Advisory Services f. Renting of Immovable Property Services g. Other services 12.1. It is the primary contention of the Appellant that the above said services are covered under the definition of "input service" within the meaning of Rule 2(l) of the CENVAT Credit Rules, 2004, which reads as follows: - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced that a wide and expansive interpretation had to be given to the word "input service and the activities being important for the respondents to promote the sale of vehicles and connected to the business of manufacturing, the entitlement to avail Cenvat credit cannot be denied. Reliance is also rightly placed upon the judgment of the Bombay High Court in Coca Cola's case (supra) and Ultra tech case (supra) wherein the said issue had also been duly considered. Similarly, the judgment in Commissioner of Central Excise vs. Bellsonica Auto Components India P. Ltd., 2015 (40) STR 41 was also stressed upon wherein, it was held that where the service tax paid on the civil work and on lease rentals was admissible once the land which was taken on lease to construct the factory and was being used by the manufacturer even indirectly by the manufacturer of the final products namely metal sheets and the benefit could not be denied. The relevant portion reads thus:- "6. The department contended that the said services were not eligible for Cenvat Credit and accordingly issued show cause notice for recovery of the credit along with interest and for imposition of penalty. The Commissioner co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the factory were required directly and in any event indirectly in or in relation to the manufacture of the final product and for the clearance thereof up to the place of removal. But for the factory the final product could not have been manufactured and the factory needed to be constructed on land. The land and the factory are used by the manufacturer in any event indirectly in or in relation to the manufacture of the final product, namely, metal-sheets. The respondents' case, therefore, falls within the first part of Rule 2(1) aptly referred to by Mr. Amrinder Singh as the "means part". 9. The respondents' case also falls within the second part of Rule 2(1) i.e. the "inclusive" part. The definition of the words "input service also specifically includes the services used in relation to setting up of a factory. Mr. Amrinder Singh rightly contended that it was not the appellant's case that the services were not used for the setting up of the factory. The doubt in this regard is set at rest by the second part of Section 2(1)(ii) which includes within the ambit of the words 'input service the setting up of a factory and the premises of the provider of the output s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titled to avail the CENVAT credit on the service tax paid on such services on the ratio of the decision in Coca Cola India(supra)." Resultantly, considering the fact that the co-ordinate Benches have already examined the aspect of the expansive view which has to be taken and the fact that the service is required as it is not only used in relation to manufacturing but also regarding the advertisement, sales promotion and storage, place of removal including recruitment, quality control coaching and training and computer network. The transportation of inputs or capital goods and outward transportation upto the place of removal are, thus, provided under Section 2(1). Section 2(1) reads thus:- 2(l) "input service" means any service,- (i) used by a provider of taxable service for providing an output service; or (ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and [clearance of final products, upto the place of removal]. The aspect of removal has also been clarified by the circular dated 28.02.2015 issued by the Ministry of Finance that it is to be given from the Port/ICD/CFS and only when the shipping bill is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been taken. The SCN has raised the query similar to the Audit Memo without considering the submissions and agreement to reverse the credit of Rs.37,714/-. The above objection therefore has no basis and liable to be withdrawn. Towards the balance amount of Rs.7,640/-, original bills are available which can be produced during the personal hearing for verification. However, there is no question of payment of interest in respect of such reversal, since the recording of the credit in the register does not amount to credit taken or credit utilized. In this regard, they have relied upon the judgment of the Punjab & Haryana High Court in the case of Maruti Udyog Ltd. [2009-TOIL-440-HC-P&H-CX]." 13.1.1. From the above, we find that the Appellant had agreed to reverse the credit of Rs.37,714/- out of Rs.45,354/-. Accordingly, the disallowance of credit of Rs.37,714/- is upheld. The appellant is liable to reverse the above credit, if not reversed already, along with interest. With regard to the balance amount of credit of Rs.7,640/-, it has been submitted by the Appellant that they are having the original documents. Consequently, we hold that the Appellant is eligible for the credit of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.25,544/-, along with interest, if not reversed already. 14. On the aspect of invocation of the extended period of limitation, we take note of the fact that the issues involved in the present appeal were subject matters of litigation before various legal fora. Further, the Department has not brought in any evidence to establish the allegation of suppression with intention to evade tax on the part of the Appellant. In these circumstances, we hold that the invocation of extended period of limitation is not sustainable. Therefore, the Appellant succeeds on merits as well as on limitation. 14.1. Further, in the facts and circumstances of the case, we hold that penalties are not imposable on the Appellant. Accordingly, the penalties imposed are set aside. 15. In the result, we pass the following order: - (i) The denial of CENVAT Credit in respect of the items mentioned at Sl. No(s). 1 to 11 of the Table at paragraph 3 of this Order (supra) is set aside. (ii) With regard to the denial of CENVAT Credit for the items mentioned at Sl. No(s). 12 and 13 of the said Table i.e., "Excess credit availed" and "Credit availed on improper documents", we hold that the Appellant is liable to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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