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2016 (3) TMI 165 - AT - Service TaxEntitlement of Cenvat credit of service tax - Appellant provided telecom towers, pre-fabricated shelters and parts thereon to telecom service providers for providing passive infrastructure on lease basis and claim for Cenvat credit - Held that: for entitlement of credit on towers, shelters or parts thereof, it is therefore essential that these should be goods and should fall, either within the ambit of capital goods specified in Rule 2(a)(A)(i) of the rules, namely goods falling under Chapters 82, 84, 85 or 90 or to components, spares or accessories of goods specified in sub-clause (i). Even for availing credit as "inputs", towers, shelters or components thereof should be goods and used for providing an output service. These are conditions precedent for availment of Cenvat credit, on duty paid on these goods, for remittance of service tax on the output services rendered, whether the output service is "BAS" or "BSS" (in the case of passive infrastructure providers) or "Telecom Services" (in the case of active infrastructure providers, namely where the telecom companies themselves own the infrastructure used for rendition of telecom services). As these conditions are not fulfilled, appellant is not entitled to Cenvat credit. Entitlement of Cenvat credit of duty of excise - Appellant provided telecom towers, pre-fabricated shelters and parts thereon to telecom service providers for providing passive infrastructure and supplier has paid Excise duty on on them as capital goods by classifying them under Chapter 85 of the Central Excise Tariff Act, 1985 - Held that: to decide whether Cenvat credit can be availed or not, first it is to be decided that whether towers and shelters are capital goods or immovable property. By relying on the judgments of Hon'ble Bombay High Court in the case of Bharti Airtel Limited vs. CCE, Pune - III 2014 (9) TMI 38 - BOMBAY HIGH COURT and Vodafone India Limited 2015 (9) TMI 583 - BOMBAY HIGH COURT, and as the the provision of towers and shelters as infrastructure used in the rendition of an output service is common to both passive and active infrastructure providers, whether of "BAS" or "BSS" in one case and "telecom service" in the other, the towers and shelters and parts are decided to be immovable property. Therefore, the appellant is not entitled to Cenvat credit. - Decided against the appellant
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