TMI Blog2015 (4) TMI 395X X X X Extracts X X X X X X X X Extracts X X X X ..... orrect and will not carry the case of appellants any further. - appellants therein were providers of storage and warehousing services; immovable property service and business auxiliary service, for which they need to have infrastructure in its place. In the cases in hand, with which we are dealing with are the telecommunication companies providing cellular services, we find that basically all the appellants herein are providers of telecommunication/cellular services and the facility created by them in form of towers and pre-fabricated buildings are for their own use. Predominantly, the towers and pre-fabricated buildings/shelters were utilised by the appellants herein for rendering their own telecom/cellular services. In view of this ratio laid down in the case of Sai Sahmita Storages Ltd. [2011 (2) TMI 400 - ANDHRA PRADESH HIGH COURT], SG Navratna [2012 (7) TMI 316 - CESTAT, AHMEDABAD ] and GTL Infrastruture Ltd., (2014 (9) TMI 647 - CESTAT MUMBAI) may not apply, as the facts in those cases are totally differen than the facts in these bunch of appeals. Be that as it may, we find that as the issue involved in this case is covered by the direct judgement of the jurisdictional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals of all the appellants are taken up for disposal by this common order as the issue involved in these appeals is the same and arises out of similar facts. 2. The miscellaneous applications filed by one of the applicants/appellants, M/s. Tata Teleservices Ltd., is for producing additional evidences in support of their appeals as also raising additional grounds of appeal. 3. Learned Senior Advocate submits that the additional evidences, which are brought on record, are in form of expert's opinion issued by the Professor of Indian Institute of Technology and that covers are immovable properties and inputs. In addition to the various case laws and also the photographs of the dismantling of towers, he would submit that they would also bring on record additional evidences in the form of agreement between M/s. Tata Teleservices Ltd., and Bhrati Airtel Ltd., for Infrastructure sharing i.e, sharing of towers and cabins for rendering various services, i.e. Passive Infrastructure Sharing and it is his submission that the revenue earned by M/s. Tata Teleservices Ltd., is subjected to service tax under the category of Business Support Services , and he urges that the miscellane ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia Ltd., 12 ST/85683/14 Reliance Telecom Ltd., 13 ST/85771 to 85776/14 Reliance Communications Ltd., 7. We dispose of the stay petitions filed by M/s. TTL, M/s. VIL M/s. ICL and M/s. VEL. We find that the issue involved in these stay petitions is regarding denial of Cenvat credit to the appellants on the ground that the Cenvat credit availed on towers used for rendering telecommunication service is ineligible Cenvat credit as they are immovable goods. Since matters already listed for final hearing of the appeals of M/s. ICL, M/s. TTL, M/s. RTL and M/s. RCL, we dispose of the stay petitions filed by the applicants herein above and take up the appeals for final disposal. 8. The relevant facts that arise for consideration are being recorded separately, so as to deal with them in that order. 8.1 M/s. TTL herein were issued show-cause notices dated 22/04/2010, 07/10/2010 and 24/10/2011 directing them to show cause as to why the Cenvat credit availed by them on towers, towers parts, cabin, cabin parts, medi-claim service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osed penalties holding that the appellants herein had suppressed the fact of ineligibility to avail Cenvat credit and accordingly, the extended period was correctly invoked on merits the towers being immovable goods credit was held to be ineligible. All the appellants were held to have availed Cenvat credit wrongly and demands were confirmed against them along with interest and penalties were also imposed. 9. Learned Senior Advocate Shri Sunil Gupta along withShri Mihir Deshmukh, Advocate appeared for M/s. TTL. Learned Senior Advocate Shri V Sridharan along with Mr. Ashish Philip Advocate appeared for M/s. VIL, M/s. ICL and M/s. VEL. Learned Advocate Shri Naresh Thacker, Advocate along with Shri Gopal Mundhva and Shri Abhishek Jaju, Advocate appeared for M/s. RTL and M/s. RCL. 10. Learned Counsel appearing on behalf of M/s. TTL would submit that the confirmation of demand by the adjudicating authority is incorrect. He would then take us through the entire order-in-original as also the show-cause notices. He would then take us through the provisions of Cenvat Credit Rules, 2004 (hereinafter referred to as CCR), more specifically reads the provisions of Rule 2 3. He would sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T. Ramaswami - AIR 1969 (Mad.) 346 v) Shree Arcee Steel Vs. Bharat Overseas Bank - AIR 2005 (Kar) 287 11. It is the submission of the learned Counsel that the reliance in the case of CCE, Bombay Vs. Hutchison Max Telecom P. Ltd., - 2008 (224) ELT 191 (Bom) is misconceived as in that case the question which has been answered is regarding the excise duty on the towers and shelters and not for eligibility to avail Cenvat credit. It is also his further submission that alternatively even if towers and shelters upon erection and installation turns into immovable property, thereby becoming non-excisable goods, there is no provision in the CCR for denying Cenvat credit on inputs which have been used for providing output service, on the ground that the erection or installation at site leads to an immovable property. It is his submission that it is well established that expression use is wide enough to include inputs in the final activities of manufacture or provision of services and credit cannot be denied on the ground that at some stage some immovable property is coming into existence; and the proposition is totally irrelevant and non-germane to the assessee's entitlement to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the findings of the Hon'ble High Court. He would then read the definition of immovable property in the Tansfer of Property Act, as well as in the General Clauses Act, and submit that these very phrases have been interpreted by the various High Courts, which are in favour of the assessee, he relied upon the following cases: i) MCD Vs. Gurnam Kaur - (1989) 1 SCC 101 ii) State of UP Vs. Synthetic Chemicals - (1991) 4 SCC 139 iii) A-One Granites Vs. State of UP Ors - (2001) 3 SCC 537 iv) Haryana Financial Corporation Vs. Jagdamba Oil Mills - (2002) 3 SCC 496 v) ICICI Bank Vs. Municipal Corporation - (2005) 6 SCC 404 13. He would also rely upon the various other decisions for the proposition that there is no definition of immovable property in the statute i.e. Central Excise Act and the Rules made thereunder. The interpretation given by the High Court in various decisions needs to be applied. Learned Counsel Shri Mihir Deshmukh, appearing on behalf of the TTL would also submit that the show-cause notice invoking extended period is incorrect in this case as the appellant had been always submitting the returns wherein Cenvat credit availment was indicated. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Bombay Vs. Hutchison Max Telecom P. Ltd., - 2008 (224) ELT 191 (Bom) an identical issue has been decided inasmuch as the product, i.e. cell site cannot be shifted without damages but various other items/components can be shifted. He also relied upon the decision of the Hon'ble Supreme Court in the case of Seth Mathuradas Vs. CIT - 1962 (44) ITR 517 (SC) and the CIT Vs. Brij Lal Lohia Mahabir Prasad Khemka - 1972 (84) ITR 273 (SC), Swaraj Mazda Ltd., Vs. CCE - 1995 (77) ELT 505 (SC) are for the propositions that additional facts, which were placed before the lower authorities were not considered by the lower authorities while coming to a conclusion and it is his submission that in these cases the appellants had produced evidences regarding dismantling of towers and shelters and re-locating the same to other places. He would rely upon the affidavit which has been filed today before the Tribunal on this point. He would also distinguish the judgment of the Hon'ble High Court of Bombay in the case of Bharti Airtel Ltd. (supra) and submit that the ratio of the case will not be applicable in the facts of this case. He would also submit that in any case extended period of limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there is no suppression of any material fact that too with intent to evade payment of duty or non-disclosure of particulars which are not required to be disclosed by the asessee under statute. It is his submission that in the instant case, the appellant had regularly filed service tax returns disclosing the Cenvat credit availed in respect of capital goods, inputs and inputs services, in the absence of any statutory requirement to disclose the nature of capital goods or inputs and its functional utility in connection with the provisions of telecommunication services, appellant cannot be held as guilty of suppression of facts with intent to evade payment of duty; hence extended period invoked in these cases is incorrect. He would also submit that the computation of demand is also erroneous as the revenue has considered the amount for which demand is incorporated in the show-cause notice issued by Indore Commissionerate. As regards the RCL, it is his submission that on merits he is adopting all the arguments made by the Senior Counsel. On limitation it is his submission that the appellants were issued draft audit para by the audit party intimating the appellant about the Cenvat Cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing considered in the context of Section 8(1) read with section 8(3)(b) of the Central Sales Tax Act. It was also observed that in the case of State of Andhra Pradesh Vs. Bharat Sanchar Nigam Ltd. (supra) ruling of the Division Bench of Andhra Pradesh High Court, it was held that telecommunication tower is immovable property and that it being a immovable property must have direct relevance to the issue as arising for adjudication in the said case. In the present case the issue is one which falls under the Credit Rules and as to whether towers and parts thereof fall within the scope and ambit of the specific definition of Capital goods and the definition of inputs under the Credit Rules,2004. Any issue falling for interpretation under the provisions of Section 8(1) and Section 8(3)(b) and 8(1) of the Central Sales Tax Act cannot ipso facto be made applicable in the context of the Credit Rules as arising in the present appeals and more particularly, when the definition as falling under the Cenvat Credit Rules are distinct and are noticeably different. (g) The decision of the Supreme Court in Collector of C.E. Vs. Jay Engineering Works Ltd., (1989(39) E.L.T. 169(S.C.) concerned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the ammonia storage tanks was claimed. The facts of this case can no manner apply to towers and parts thereof, prefabricated building/shelter which are immovable property and not excisable goods and hence, reliance on this judgment is misconceived. (f) In the Division Bench's judgment of this Court in the case of Bharti Tele-Ventures Ltd. and Sunil Bharti Mittal Vs. State of Maharashtra, (2007 Vol.109(1) Bom.L.R. 0595) the issue was whether the construction of cell sites and erection of towers is included in building and/or development within the meaning of Maharashtra Regional and Town Planning Act,1966 (for short 'MRTP Act') or other Corporations Act. The issue arose in the context of a Notification dated 4.7.2005 issued by the Government of Maharashtra under Section 154 of the MRTP Act by which the Government of Maharashtra had sought to amend its earlier order dated 9.10.1996 thereby authorising various Municipal Corporations in the State to charge retrospectively from 9.10.1996 a premium at the rate of land value as per the ready reckoner for the area occupied by the cabin, the tower for granting permission under Section 45 of the MRTP Act to the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s their Lordships categorically recorded that towers and shelters would fall under the category of immovable property and not goods. While responding to the submission made by the learned Counsel he would submit that reliance placed by the Senior Counsel for TTL regarding the expert's opinion of IIT Professor, it is nothing but inform of question and answers and is like reading a book. It is his submission that no relevant details on which reliance is placed upon is indicated by the expert in his opinion nor there is any reference to technicalities/details, hence the information cannot be considered as an expert opinion. It is also his submission that the views expressed by the expert opinion on the immovability aspects on the towers is totally unexplained and without any technical details. Subsequently, he reads the infrastructure sharing agreement between the TTL and others and submit that it is clearly spelt out what is being shared is nothing but and is an immovable property. On GTL infrastructure Ltd., it is his submission that it cannot have any precedential value in the case in hand. Subsequently, he would distinguish the various judgements relied upon by the Counsel and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit Rules, 2004 to drive home the points. On perusal of the relevant rules, we find that the said rules do provide for availment of Cenvat credit on capital goods as well as inputs. In the cases in hand we find that the towers and shelters, which were received by the appellants at site were not capital goods in the form as they were received, inasmuch as they were covered under Chapter 73, the pre-fabricated shelters were covered under Chapter No. 94. The definition of capital goods do not include these two chapters in the scope, for the eligibility to avail Cenvat credit. As regards the arguments that these can be inputs we find that definition of inputs may be wider as has been argued by the Counsel for the appellants, but the inputs which are used for providing output service is the link which has not been established in these cases by the appellant. In our considered view, the ratio of the decision of the Hon'ble High Court of Bombay in the case of Bharti Airtel Ltd., (supra) as regards the eligibility to avail Cenvat credit would be directly applicable in all these cases. In the said case the Hon'ble High Court had formulated the substantial question of law which reads ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... semblance of any discussion, has partly allowed the assessee's appeal. In view of our findings and the conclusion in the earlier part of the judgment, we cannot agree with the reasoning of the Tribunal. The reliance of the aforesaid judgment on behalf of the Revenue is quite appropriate. The enunciation of law as laid down in the judgment clearly goes to show that the towers are immovable property and non excisable and hence, can neither be regarded capital goods so as to fall within the definition of 'capital goods' appearing in Rule 2(a) of the Credit Rules, nor can be categorized as 'input' applying Rule 2(k) of the Credit Rules. 31. In the light of the aforesaid discussion we examine whether on the rules as they stand the appellants would be entitled to the credit of the duty paid on the item in question on the output service namely the cellular service. We may observe that a plain reading of the definition of 'capital goods' as defined under Rule 2(a)(A) of the Credit Rules show that all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading No.6805, grinding wheels and the like, and parts thereof falling under heading 6804 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the appellants that the tower and part thereof, the PFB and the printers would also falls under the definition of 'input' as defined Rule 2(k) also cannot be sustained. The definition of inputs as defined under rule 2(k) includes all goods, except light diesel oil, high speed diesel oil, motor spirit, commonly known as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not and includes lubricating oils, greases, cutting oils, coolants, accessories of the final products cleared along with the final product, goods used as paint, or as packing material, or as fuel, or for generation of electricity or steam used in or in relation to manufacture of final products or for any other purpose, within the factory of production, and as provided in sub-clause (ii) 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. Explanation (2) of sub-rule (k) is also which provides that input include goods used in the manufacture of capital goods which are further used in the factory of the manufacturer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am Ltd. - 2012 (49) and observed that telecommunication towers are held to be immovable property. We further reproduce the relevant paragraphs of the judgement in the case of BSNL . The Telecommunication tower, of a height of around 90 metres and embedded either to the earth or to the roof top of a building, is under the control and possession of the passive service provider. The manner in which this 90 metre huge structure is fastened would necessitate its being excluded from the ambit of goods , and included within the category of immovable property . Transfer of the right to use immovable property would not fall within the ambit of Section 4(8) of the Act as immovable property is excluded from the definition of goods under Section 2(16) of the Act. Section 3(26) of the General Clauses Act, 1897 includes, within the definition of the term immovable property , things attached to the earth or permanently fastened to anything attached to the earth. Section 3 of the Transfer of Property Act gives the following meaning to the expression attached to the earth : (a) rooted in the earth, as in the case of trees and shrubs; (b) imbedded in the earth, as in the case of walls ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owers and pre-fabricated buildings can be done so by dismantling. 27. We find no merits in this argument as the Hon'ble Apex Court in the case of Triveni Engineering Industries case was considering an issue of excisability of the plant and machinery wherein generator and turbine were connected to form a functional power plant. In the case in hand, we are concerned with the eligibility to avail Cenvat Credit on the towers and pre-fabricated buildings/shelters which is covered by the direct decision of the jurisdiction High Court in the case of Bharti Airtel Ltd. 28. Learned Counsel argued that the Cenvat credit availed on the towers and pre-fabricated buildings/shelters are to be allowed to them on the ground that they have been providing output service of infrastructure facilities to various other telecommunication service providers. It is the submission that if they are providing services under the infrastructure service, which in these cases is called passive telecom infrastructure'. They relied upon the decision of the Hon'ble High Court of Andhra Pradesh in the case of Sai Sahmita Storages Ltd., SG Navaratna Highway and GTL Infrastructure Ltd. (supra) to subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d period was invoked. We find strong force in the contention raised by the learned Counsel. We find in the case of TTL, RIL, RCL various audits took place and the said audit report did not indicate any error in availing the Cenvat credit on towers, pre-fabricated buildings and shelters. In the case of Vodafone Essar Ltd. and Idea Cellular Ltd., we find that arguments put forth are the same that they are availing Cenvat credit, utilised the same and had informed the department about their activity in the ST-3 returns. It is also noted that the issue of availment of Cenvat credit on the towers and pre-fabricated buildings and shelters was being disputed before the various forum and hence all the appellants could have entertained a bonafide belief that they were eligible to avail Cenvat credit of duty paid on towers and pre-fabricated buildings/shelters. 31. In our view the law as to invocation of extended period for demand of tax is well settled. In T.N. Dadha Pharmaceuticals Vs. CCE Madras - 2003 (152) ELT 251, the Hon'ble Apex Court held that three requirements have to be cumulatively satisfied for invoking extended period while observing as under: A perusal of the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. The issue is mainly of interpretation without involving suppression of material facts with intent to evade duty. In all these cases it is not the case of revenue that appellants have failed to disclose any material information which was statutorily prescribed to be disclosed in their periodical returns. In our view once the assessee has regularly filed service tax returns disclosing all the requisite particulars and additionally even audit has taken place, allegation of suppression of facts with intent to evade duty cannot be sustained. It was for the authorities to properly verify the returns and seek information or put queries, if not done so assessee cannot be penalised and more so with allegation of suppression of facts. In all these cases the appellants have not failed to disclose any particulars which were legally required to be disclosed and revenue also did not ask any further details during the relevant period as to the issue. We find that judgement of Hon'ble High Court of Bombay in the case of Rajkumar Forge Ltd., Vs. UOI - 2010 (262) ELT 155 (Bom) and the Hon'ble Karnataka High Court in the case of CCE, Bangalore Vs. MTR foods Ltd., - 2012 (282) ELT 196 (Kar) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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