TMI Blog2016 (9) TMI 1136X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax paid on services utilized for erection of tower. Demand - availment of CENVAT credit on capital goods at one go -Held that:- it is the case of revenue that appellant cannot do so and as per rules they have availed 50% of the duty paid in first year in which CENVAT credit are received and balance 50% next year. Appellant has availed 100% credit in the second year. We find that there is no dispute that appellant is eligible to avail CENVAT credit on the capital goods and Central Excise duty is paid on capital goods; they are received by appellant and used. In our view the provisions of Rule 4(2)(a) of Cenvat Credit Rules, 2004, do no restrict availment of credit of 100% of duty paid on capital goods in the second year. The issue is now squarely covered in favour of appellant in the case of Herbicure Pvt. Ltd. [2007 (4) TMI 102 - CESTAT, KOLKATA] wherein similar issue is decided by Tribunal in favour of assessee. By respectfully following the ratio we hold that the appeal of the appellant on this point succeeds. Demand - supply of Diesel - diesel is excluded input for availing CENVAT credit - Held that:- it is claimed by the learned Chartered Accountant that they had avail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al No. 04/STC/BR/10-11 dated 28.04.2010. 2. The relevant facts that arise for consideration after filtering out unnecessary details are that appellant is engaged in providing tele communication services and availed CENVAT credit of service tax paid on the services which was utilized. An audit was conducted of the records of the appellant. Audit party was of the view that appellant having provided exempted as well as taxable services has wrongly utilized the entire service tax credit, in excess of 20% ceiling as per the provisions of Cenvat Credit Rules, 2004; availed CENVAT credit on various services which cannot be considered input services. The period involved in this case is March 2004 to December 2007. A show-cause notice was issued demanding the tax; and dispute relates to following issues:- Sr. No. Issue Cenvat Credit Period of Dispute disallowed Rs. 1 2 3 4 1 Utilisation of Cenvat Credit in excess of 1 20% 2004-05 to December-2007 1,270,986 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amount Rs 1 2 3 1 September 04 2,965,739 2 November 04 1,736,781 3 December 04 2,394,166 4 January 05 1,195,147 5 February 06 995,768 6 March 05 2,960,421 7 April 05 886,331 8 May 05 4,767,122 9 July 05 2,437,570 10 August 05 1,581,916 11 October 05 1,683,961 12 November 05 3,854,674 13 January 06 2,685,183 14 March 06 3,325,786 15 April 06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Particulars 1 Sai Shamita Storages (P) Ltd. [2011 (23) STR 341 (AP) 7,8,9] 2 Mundra Ports Special Economic Zone Ltd [2015-TIOL-HC-AHM-ST] 3 Bellsonica Auto Components India P Ltd [2015 (7) TMI 930] 4 Cadila Healthcare Ltd[2013 (30) STR 3 (Guj.)] 5 Navratna S.G Highway Prop. Pvt. Ltd [2012 (28) STR 166 (Tri-Ahbd.)] (iii) Further the annexure-III to the show cause notice (refer page 73 of the appeal set) summarizes the nature as well as period of dispute. It will be evident that column 3 i.e. availment of credit on input service relating to the telecommunication towers and part thereof, an amount of ₹ 83,760/- pertains to the period 2003-04. It is submitted that during the said period the cenvat credit was availed under Service Tax Credit Rules, 2002 i.e prior to the Cenvat Credit Rules,2004 coming into force. The show cause notice has demanded the said credit under rule 14 of the CCR, 2004 read with section 73 of the Finance Act,1994. It is submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capital goods cannot be demanded as said credit will be eligible in subsequent year. Therefore, demand of credit is not sustainable. (d) The credit on input services related to supply of diesel: (i) The appellants are engaged in providing telecommunication services. The towers are required to be erected at various places. The running of the tower with the equipments such as MSC, BSC, BTS, etc. requires uninterrupted supply of electricity. The appellant keeps stand-by generator and diesel to ensure that in case of disconnection of electricity, the equipments are supplied electricity with the generator. The diesel is used as fuel for generating electricity. The definition of input specifically covers input as fuel for generation of electricity or steam. In the present case also, the fuel is used for generation of electricity. Further the restriction of not allowing the credit of duty paid on diesel is provided in definition of inputs as defined under rule 2 (k) of the CCR, 2004 whereas the dispute in the present case is in relation to the services used in supply of diesel. The company has availed the credit of service tax paid on such services and not the credit of the duty p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmission, the issue regarding eligibility of credit on towers shelters was decided by the Larger Bench in the case of M/s Idea Mobile Communication Ltd, M/s Idea Cellular Ltd, others Versus Commissioner of Central Excise (Adj) / Commissioner of Service Tax 2016 (3) TMI 165 CESTAT NEW DELHI (LB). as reported in [2016 (3) TMI 165]. Thus it will be evident that the matter was finally decided by the Larger Bench. The reference of the Larger Bench itself substantiates that there was divergent view regarding eligibility of credit on towers and shelters. Accordingly, it is submitted that there was reasonable cause for availing the said credit. Accordingly, it is submitted that penalty shall not be imposed as per section 80 of the Finance Act, 1994. The appellant rely on the following judgement: * GUJARAT STATE PETRONET LTD. 2013 (32) S.T.R. 510 (Tri. - Ahmd.) (iii) The Tribunal in the case of M/s Vodafone SR Digilink India Ltd. as reported in [2016 (4) TMI 549 Tri-Chandigarh] in an identical issue was held that the availment of credit on towers and shelters was disputed and settled by the Larger Bench. The appellant also relies upon the following judgments wherein it is held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to such a conclusion we address each issue as under:- (a) Demand pertaining to utilization of CENVAT credit in excess of 20% As per the provisions of Rule 6(3)) of Cenvat Credit Rules, 2004, cenvat credit cannot be utilized in excess of 20% of the credit, if an assessee is providing taxable and non-taxable services. Learned Counsel was correct in submitting that similar issue in respect of appellant is decided by this Bench as reported at 2009 (16) STR 714. Since similar issue in appellant s own case is decided in their favour following the same, we hold that revenue has no case on this issue. (b) Demand pertaining to CENVAT credit of service tax paid on construction of tower On perusal of Tribunal s order No. A/86785/15/SMB dated 30.04.2015, we find that same issue was agitated before the Bench. Tribunal considering the issue from all angles held that CENVAT credit can be availed of service tax paid on services utilized for erection of towers. We do not find any reason to deviate from such a reasoned order. Accordingly, we hold that CENVAT credit availed of service tax paid on services utilized for erection of tower. (c) Demand in respect of availment of CENVAT cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing with various authorities for and in respect of the business activity and paid service tax to the Government. This issue is now settled by Hon'ble High Court of in the case of Hindustan Coca Cola Beverages Pvt. Ltd. 2010 (19) STR 280 (Tri. Del.) and in respect of catering charges by the decision of this Bench in their own case in final order dated 31.03.2015. Accordingly, appeal of the appellant on these two points are allowed. (f) Demand in respect of Tower and Shelter The demand on this issue is in respect of the CENVAT credit of duty paid on Towers and Shelters. The issue is no more res integra and is covered against the appellant by the judgement of the Hon'ble High Court of Bombay in the case of Bharati Airtel 2014 (35) STR 865 (Bom). Accordingly, we hold that appellant s appeal on this point fails and they are directed to pay back the amount with interest. 8. Since all the issues involved in this case are of interpretative nature, there is no reason to visit appellant with any penalty. 9. As we have given detailed findings on merits of the case itself, we are not recording any findings on the limitation aspect and various other arguments forwarded. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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