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TMI Blog2017 (12) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, the show cause notice was issued on 23.04.2009 to deny cenvat credit. The Ld. Advocate fairly agreed that as per the decision of the Larger Bench of the Tribunal in the case of BSNL and others vide Interim Order No.41/2016 date 03.03.2016 as held that cenvat credit on the items in question is not available, therefore, the Ld. Counsel fairly admitted that on merits they are not having the case before this Tribunal but he prayed that as duty has been confirmed by invoking extended period of limitation, therefore, the demand pertains to the extended period of limitation is to be set aside and no penalty is imposable on the appellant. To support this contention, he relied on the decision of Mattel Toys (India) Pvt. Ltd. reported in 1992 (58) ELT 218 (Tribunal)., Lanco Industries Ltd. 2011-TIOL-110-CESTAT-Banglore and Accurate Chemicals Ltd. reported in 2014 (310) ELT 441 (Allahabad). He also submits that the present demand is also time barred. To support this contention, he also relied on the decision of BSNL and others vide Interim Order No.142-154/2015 dated 28.07.2015. 3. He further submits that the issue involved in the matter is of interpretation and the same has been init ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not entitled to avail the cenvat credit on the items in question. Issue No. 2 & 3: We find that the issue of availability of cenvat credit on the above said items was in dispute and the matter has been referred to the Larger bench of this Tribunal in the case of BSNL and others Vide Order dated 28.07.2015, wherein this Tribunal observed as under: 7. The issue before us is to decide is that whether the appellants are entitled to take Cenvat Credit on towers, pre fabricated shelters and accessories thereof being provider of output services or not? 7.1 The Revenue is relying on the decision of Bharti Airtel Ltd. (Supra) of Hon'ble High Court of Bombay to deny Cenvat Credit. In the said decision the Hon'ble High Court of Bombay itself has clarified that we are not deciding any wider question but restricting our conclusion to the facts and circumstances which was filed for our consideration in these appeals. 7.2. Therefore, as view expressed by the Hon'ble High Court of Bombay, we are required to deal with contention of the appellants and thereafter to decide whether the facts of the cases in hand are identical to the case of Bharti Airtel Ltd. (Supra) of the Hon'ble High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otton Spg. & Wvg. Mills Co. Ltd. we are of the considered view that the purchase of goods by the petitioners from outside the State, comprising goods specified in the certificates of Registration under the CST Act granted to them, against issue of C forms and where the goods have been employed in erection and maintenance of cell phone towers which are integral to Telecommunication Network, fall within the ambit of Section 8(1) read with Section 8(3)(b) of the CST Act and are entitled to be taxed accordingly. The fact that the goods purchased by the petitioners were neither sold nor used in the manufacture of goods for re-sale does not constitute violation of the C forms. Consequently, levy of penalty, on the factual parameters apparent on the record of these cases, is unsustainable." 7.4. The said decision was referred before the Hon'ble High Court of Bombay in the case of Bharti Airtel Ltd. (Supra) but Hon'ble High Court has only given the finding that the said decision is in context of Central Sales Tax Act 1956 and cannot be made applicable to the case in hand as it pertains to Cenvat Credit Rules. 7.5 We find that in the case of Jawahar Mills Ltd. (Supra) the Hon'ble Apex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, 1944 with effect from 7.7.2009, the date on which it was notified by the Central Government from the date of the notification. According to learned counsel for the appellant, this amended definition would apply only to the factory or manfuacturer and would not apply to the serivce provider. According to him, either before the amendment made in the year 2009 or thereafter, the appellant was neither factory nor manfuacturer and he has only constructed jetty by use of cement and steel for which he was entiteld for input credit as jetty was constructed by the contractor, but the jetty is situated within the port area and the appellant is a service provider. According to the appellant, his case is squarely covered by the judgment of the Division bench of the Andhra Pradesh High Court in Commissioner of Central Excise, Visakhapatnam-II Vs. Sai Sahmita Storages (P) Limited, 2011 (270) ELT 33 (A.P) = 2011-TIOL-863-HC-AP-CX Rule 2(K) would demonstrate that all the goods used in relation to manufacturer of final product or for nay other purpose used by a provider of taxable service for providing an output serivce are eligible for Cenvat Credit. it is not in dispute that the appellant is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , one is that the appellant would have given entire contract to the contractor for making jetty by giving material on his end and then make the payment, the other method was that the appellant would have provided material to the cotractor and labour contract would have been given. The appellant claims that he has provided cement, steel etc. for which he was entitled for input credit and, therefore, in our opoinion, the appellant was entitled for input credit and it cannotbe treated that since construction of jetty was exempted, the appellant would not be entitled for input credit. The view taken contrary by the Tribunal deserves to be set aside. 7.9. We, further, find that the decision in the case of Mundra Ports & Special Economic Zones Ltd. (Supra) was not before the Hon'ble High Court of Bombay for consideration in the case of Bharti Airtel Ltd. (Supra). 7.10. In these circumstances, we expressed our opinion that we are not in full agreement of the decision taken by the Hon'ble High Court of Bombay in the case of Bharti Airtel Ltd. (Supra) in the light of the decision of the Hon'ble High Court of Bombay in the case of Mundra Ports & Special Economic Zones Ltd. (Supra). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that case the Cenvat Credit taken on the inputs for providing that service is entitled for Cenvat Credit as per Rule 2(K) (ii) of the Cenvat Credit Rules, 2004. Furhter, we find that the adjudicating authority has heavily relied upon the decision of Bharti Airtel ltd. (Supra); in the said case the facts are totally different to the facts of the case in hand. In fact, in that case appellant was engaged in providing cellular telephone service and as per Board Circular No.137/315/2007-CX-4 dt. 26.02.2008, it is clarified that no cenvat credit on towers and BTS cabin is permissible for cellular phone service provider. In that instant case, the towers and the cabins are used by the appellant as passive Telecom Infrastructure for providing output service namely Business Auxiliary Service as declared by the appellant to the department in 2005 and agreed to by the department in their reply dt. 20.09.2015. 9. We further find that in this case the intention of the appellant and their client (Operators) is to confer the Operators a right to install active infra network equipment including GSM Antenna and BTS equipment, and to extend and receive, highly specialized technical service, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d against the appellant by this Tribunal on 06.01.2012 in the case of Bharti Airtel Ltd. (Supra). Therefore, the allegation of suppression of fact is not sustainable. Consequently, the extended period of limitation is not invokable in these matters as in some of the cases, the assessing authorities themselves were allowing Cenvat Credit on these items. Therefore we hold that extended period of limitation is not invokable. Accordingly, the demand pertains to extended period of limitation are set aside. 10. On merits, we find that the facts of the cases in hand are similar to the fats of the cases of Bharti Airtel Ltd. (Supra), although we are not in agreement to the same but and we are bound by the decision of the Hon'ble High Court and the same is to be followed as judicial discipline. Therefore, on merits, we hold that appellant are not entitled to take Cenvat Credit on towers, portable shelters and accessories thereon in the light of decisions of Bharti Airtel Ltd. (Supra) of the Hon'ble High Court of Bombay. 11. With regard to penalties, as we observed that the allegation of suppression of facts for availing inadmissible Cenvat Credit with malafide intention is not sustaina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n telecom towers and pre-fabricated building and parts thereof is admissible. 16. I fully agree with para 12(a) of my Ld. Brother's order that on merits the appellants have no case in the light of decision of Bharti Airtel Ltd. (supra) of High Court Bombay. Indeed in para 10 of his judgment, it is clearly stated that: "10. On merits, we find that the facts of the cases in hand are similar to the facts of the cases of Bharti Airtel ltd. (Supra), although we are not in agreement to the same but and we are bound by the decision of the Hon'ble High court and the same is to be followed as judicial discipline. Therefore, on merits, we hold that appellant are not entitled to take cenvat credit on towers, portable shelters and accessories thereon in the light of the decisions of Bharti Airtel ltd. (Supra) of the Hon'ble Court of Bombay." Thus having held that on merits the appellants are not entitled to take cenvat credit on towers, pre-fabricated building (PFB) and parts thereof in the light of the decision of Bombay High Court in the case of Bharti Airtel (supra), I am not able to persuade myself to reconcile with the order contained in para 12(b) and 12(c) quoted above because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e telecom service or even some other service. Thus I have no doubt in my mind that the order contained in para12(b) and 12 (c) quoted above is in contradiction of the reasoning, ratio and view/finding of the Bombay High Court Judgment which my ld. Brother has also held to be binding on CESTAT. 18. My Ld. Brother has referred to the Judgment's of CESTAT in the cases of GTC Infrastructure (Supra) and M/s Reliance Infratel ltd. (Supra). While the judgment in the case of GTL Infrastructure ltd. was passed before the judgment of Bombay High Court in the case of Bharti Airtel, I find that in the case of Reliance Infratel, the Judgment of Bharti Airtel has been distinguished essentially on the ground that in that case the output service was telecom service while in the case of Reliance Infratel, the output service is Business Support Service (Support Service for Business or Commerce). I am of the view that this distinction is of no consequence vis-a-vis the analysis, reasoning and ratio following which the Bombay High Court formed the view that towers, being immovable property, cannot be goods. In the Judgment of Reliance Infratel, CESTAT has also made a reference to the following o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... once telecom towers, PFB and parts thereof are held to be ineligible for credit by Bombay High Court in the case of Bharti Airtel (supra) to allow credit on PFB in some other case in similar set of circumstances merely because those were classified by the supplier in a different chapter will also not be in conformity with the said Bombay High Court judgement, more so when immovability thereof has been taken as a ground by Bombay High Court for disallowing the credit on PFB as is also evident from the fact that it cited (in para 29 of the Bharti Airtel Judgement) the judgement in the case of CCE, Mumbai-IV Vs. Hutchison Max Telecom- 2008 (224) ELT 191 (Bom.) (Specially quoting para 7,8 and 9 thereof) 21. In the light of the foregoing, I hold that in view of the reason/ratio and finding of the Bombay High Court in the case of Bharti Airtel (Supra), Cenvat credit in respect of telecom tower, PFB and parts thereof is not available even in those cases where such credit is allowed by my ld. Brother vide para 12 (b) and (c) of his Judgment. Consequently, I express my respectful disagreement with the order of my ld. Brother as contained in para 12(b) and 12 (c) of his judgment and pass t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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