TMI Blog2015 (9) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 869 of 2015 - - - Dated:- 10-9-2015 - S. C. Dharmadhikari And B. P. Colabawalia, JJ. For the Appellant : Mr Harish Salve, Sr. Counsel i/b M/s Duttmenon Dunmorrsett For the Respondent : Mr Pradeep S Jetly with Mr Jitendra B Mishra JUDGMENT [ Per B. P. Colabawalia, J. ] 1. These Appeals, filed under section 35G of the Central Excise Act, 1944 read with section 83 of the Finance Act 1994, take exception to the final order dated 16th March, 2015 ( impugned order ) passed by the Customs, Excise and Service Tax Appellate Tribunal, Mumbai ( CESTAT ). In a nutshell, CESTAT confirmed the order of the Commissioner (TAR), Mumbai, who held that the Appellant was not entitled to claim CENVAT credit of duty paid on towers (in CKD/SKD form), parts of towers, shelters / prefabricated buildings (for short the said goods ) purchased by them and used for providing output service. In both the Appeals, the Appellant and the Respondent are one and the same and the questions of law, as framed, are also identical. The only difference between the two Appeals is the period for which the Appellant had availed of CENVAT credit and which was now being demanded and recovered from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances of the case, the Hon'ble Appellate Tribunal erred in not appreciating that the towers (in CKD and SKD form), parts of tower / shelter would qualify as components, parts and accessories of goods falling under Chapter 85? (h) Whether in the facts and circumstances of the case the Hon'ble Appellate Tribunal erred in not appreciating that for the purposes of availing credit under the CENVAT Credit Rules, towers (in CKD and SKD form) and parts of the towers were goods when received and credit was taken and it is immaterial whether the same were erected later? (i) Whether the Hon'ble Appellate Tribunal erred in not considering and appreciating the technical literature and evidence placed before it showing that both the towers and the shelters were capable of being shifted or moved and rendering perverse findings? (j) Whether in the facts and circumstances of the case, the Hon'ble Appellate Tribunal erred in not appreciating that towers were accessories to the capital goods? (k) Whether the Tribunal erred in law to appreciate that the identity of towers and pre-fabricated buildings / shelters are not lost merely when they are embedded in the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s equipment. At the heart of the whole infrastructure is the Base Transceiver Station (BTS) which facilitates wireless communication between the customers equipment (eg. mobile phones) and the main network. The general architecture of the BTS system involves various equipment such as antennae, towers, pre-fabricated buildings etc. and all these, in combination, are used by the Appellant in delivering telecom services to its customers. 4. According to the Appellant, in its ordinary course of business, it had availed of CENVAT credit for duty paid on inputs and capital goods as well as availed of credit of service tax paid on input services used for providing output service, and utilised the same for discharging their output service tax liability. The Appellant had inter alia availed of CENVAT credit for duty paid on towers (in CKD/SKD form), parts of towers, shelter / prefabricated buildings purchased by them and used for providing output service. 5. As the statutory authorities were of the view that the Appellant is not entitled to avail of CENVAT credit under the CENVAT Credit Rules 2004 , show cause notices were issued to the Appellant for the period from 2005-2006 to 2010 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is dismantled. 8. In the alternative, Mr Salve submitted that in any event of the matter, there was no generic difference between capital goods' and other goods' other than their treatment in relation to their use in manufacture. According to Mr. Salve, there is no difference in relation to the use of any goods' in relation to provision of output service. In this regard, he drew our attention to the definition of the words capital goods' and input' appearing in rule 2(a)(A) and rule 2(k) of the CENVAT Credit Rules, 2004 respectively. According to Mr Salve, in the facts of the present case, and looking to the definition of the word input', only two conditions need to be satisfied for the Appellant to avail of CENVAT credit. These are (a) the CENVAT credit is claimed for goods in relation to the tax paid on the goods; and (b) the said goods are used for providing output service. According to Mr Salve, at the time the input duty is paid, the duty should relate to the goods acquired by the service provider. Thereafter, if the goods are required to be fastened to immovable property to facilitate their use, would not by itself, make them lose their char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant was not entitled to credit of duty paid on tower parts, green shelter, printers and office chairs? 2) Whether in the facts and circumstances of the case, the Appellate Tribunal was correct and justified in holding that the appellant was not entitled to credit of duty paid on tower parts, green shelter on the ground that tower / green shelter is 'immovable property' and hence, do not qualify as 'capital goods' or 'inputs' as defined under the Cenvat Credit Rules, 2004? 3) Whether in the facts and circumstances of the case, the appellate Tribunal was correct and justified in holding that tower would not qualify as 'part' or 'component' or 'accessory' of the capital goods i.e. antenna? 12. On these questions of law, as framed, this Court at paragraph 16 noted the arguments canvassed on behalf of M/s Bharti Airtel Ltd. In a nutshell, and so far as they are relevant for our purposes, the arguments of the Appellants therein were as follows:- (a) The Tribunal has misinterpreted the application of CENVAT Credit Rules, 2004 in rejecting the Appellant's claim to avail credit of the duty paid on the towers and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereof. This Court has further held that in any event the towers and parts thereof are in the nature of immovable property and are non-marketable and non-excisable and therefore, they cannot be classified as inputs' so as to fall within the definition of rule 2(k) of the CENVAT Credit Rules, 2004. The relevant portion of Bharti Airtel's decision reads thus:- 23. In the context of these definitions the contentions as raised by the appellant are required to be examined. The position of the goods in question vis a-vis the plain application of the rules is that the tower and parts thereof are fastened and are fixed to the earth and after their erection become immovable and therefore cannot be goods. Further in the CKD or SKD condition the tower and parts thereof would fall under the chapter heading 7308 of the Central Excise Tariff Act. Heading 7308 is not specified in clause (i) or clause (ii) of rule 2 (a)(A) of the Credit Rules so as to be capital goods. The goods in question would not be capital goods for the purpose of CENVAT credit as they are neither components, spares and accessories of goods falling under any of the chapters or headings of the Central Excise Tari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) and (iii) and sub-rule (2) indicates that only the category of goods in Rule 2(a)(A) falling under clause (i) and (iii) used for providing output services can only qualify as capital goods and none other. Admittedly the goods in question namely the tower and part thereof, the PFB and the printers do not fall within the definition of capital goods and hence the appellants cannot claim the credit of duty paid on these items. Even applying the ratio of the judgments as relied upon by the appellants as observed above the said goods in the present context cannot be classified as capital goods. 32. As regards second contention of 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 fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the earth on which the antennas are installed and hence cannot be considered to be an accessory or part of the antenna. The position in this regard stands fortified from the decision of the Supreme Court in the case of Saraswati Sugar Mills vs CCE Delhi, (2011 (270) ELT 465) . From the definition of the term input' as defined in 2 (k) of the Credit rules it is clear that the Appellant is a service provider and not a manufacturer of capital goods. A close scrutiny of the definition of the term capital goods and input indicates that only those goods as used by a manufacturer would qualify for credit of the duty paid. As observed hereinabove a service provider like the appellant can avail of the credit of the duty paid only if the goods fall within the ambit of the definition of capital goods as defined under Rule 2(a)(A) of the Credit Rules. The contention of the appellant that they are entitled for the credit of the duty paid towers and PFB and printers is defeated by the very wording of the definition of input. In any case towers and PFB are in the nature of immovable goods and are non-marketable and non-excisable. If this be the position then towers and parts thereof cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e settled legal proposition that a judgment of this Court is binding, particularly when the same is that of a coordinate Bench or of a larger Bench. It is also correct to state that even if a particular issue has not been agitated earlier or a particular argument was advanced but was not considered the said judgment does not lose its binding effect, provided that the point with reference to which an argument is subsequently advanced has actually been decided. The decision therefore, would not lose its authority merely because it was badly argued, inadequately considered or fallaciously reasoned . The case must be considered taking note of the ratio decidendi of the same i.e. the general reasons or the general grounds upon which the decision of the court is based, or on the test or abstract from the specific peculiarities of the particular case which finally gives rise to the decision. (Vide Somawanti v. State of Punjab [AIR 3 (2013) 3 SCC 1 1963 SC 151], Ballabhadas Mathurdas Lakhani v. Municipal Committee, Malkapur [(1970) 2 SCC 267 : AIR 1970 SC 1002], Ambika Prasad Mishra v. State of U.P. [(1980) 3 SCC 719 : AIR 1980 SC 1762], SCC p. 723, para 6 and Director of Settlements v. M ..... X X X X Extracts X X X X X X X X Extracts X X X X
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