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2023 (2) TMI 895 - AT - Service TaxDenial of CENVAT credit - credit availed and utilized on inputs and capital goods used for setting up of passive infrastructure for provision of Business Support Services [BSS] - whether towers are movable property or immovable property? - HELD THAT:- The issue involved in this appeal stands decided in favour of the appellant by the Delhi High Court in Vodafone Mobile Services Limited vs. CST, Delhi [2018 (11) TMI 713 - DELHI HIGH COURT], which decision was affirmed by the Supreme Court in Commissioner of Service Tax Delhi vs. Vodafone Mobile Services Limited [2019 (7) TMI 1419 - SC ORDER]. The “permanency test’ was examined at length by the Supreme Court in Commissioner of Central Excise, Ahmedabad vs. Solid & Correct Engineering Works [2010 (4) TMI 15 - SUPREME COURT]. In this case the Supreme Court drew a distinction between machines which by their very nature are intended to be fixed permanently to the structures embedded in the earth and those machines which are fixed by nuts and bolts to a foundation not because the intention was to permanently attach it to the earth but because foundation was necessary to provide a wobble free operation to the machine. It would also be relevant to refer to the decision of the Supreme Court in SIRPUR PAPER MILLS LTD. VERSUS COLLECTOR OF CENTRAL EXCISE, HYDERABAD [1997 (12) TMI 109 - SUPREME COURT] wherein the Supreme Court observed that merely because a machine is attached to earth for more efficient working and operations it would not per se become immovable property. This issue was also examined at length by a Division Bench of the Tribunal in M/S. RELIANCE JIO INFOCOMM LTD. VERSUS ASSISTANT COMMISSIONER, CGST & CENTRAL EXCISE, BELAPUR-IV DIVISION [2022 (4) TMI 1361 - CESTAT MUMBAI] and it was held that towers and shelters would not be immovable property. Thus, in view of the factual position and the decisions referred, the towers and shelters would not be immovable property. CENVAT Credit on capital goods - HELD THAT:- The Delhi High Court in Vodafone Mobile Services [2018 (11) TMI 713 - DELHI HIGH COURT] had also examined this issue and held that the Tribunal clearly erred in concluding that the towers and parts thereof and the prefabricated shelters are not capital goods with the meaning of Rule 2(a) of the Credit Rules - Thus also, the appellant was also entitled to take CENVAT credit since the items in dispute are ‘capital goods’. Appeal allowed.
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