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TMI Blog2023 (7) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... was availed on 'Towers and Parts & Accessories of Towers' falling under Chapter 73 of the Central Excise Tariff Act, 1985. The impugned notice proposed dis-allowance of the same on two grounds: (i) The assessee purchased 'Towers and Parts & Accessories of Towers' falling under Chapter 73 of the Central Excise Tariff Act, 1985 (CETA '85) and availed credit on the duty of excise paid on them amounting to Rs.90,54,251/- during 2006-07 & 2007-08. The impugned notice proposed dis-allowance of the same on the ground that the Towers were not 'capital goods' as defined under Rule 2(A) of the said Rules and that the 'parts & accessories' used in the erection of towers do not satisfy the definition of 'input' as the towers are civil structures attached to earth and not 'excisable goods'. (ii) BSNL. Eastern Telecom Region (ETR) and BSNL, Eastern Telecom Project (ETP) provide IUC service and undertook various project related jobs for all the BSNL branches of Eastern India. ETC & ETP receive inputs, capital goods and input services from various vendors and service providers. ETR & ETP transferred credit of Rs.6,68,37,663/- to the assessee through inter office memo called ATD/TED during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital goods' is defined under Rule 2(a) (A) of the CENVAT Credit Rules, 2004. The definition uses the verb 'means' and not the verb 'includes'. Therefore, it is a specific and exhaustive definition. The definition does not include items of Ch. 73. Accordingly, parts/ accessories of Towers being classifiable under Chapter 73 cannot be treated as 'Capital Goods'. Parts / accessories of Towers cannot be input for output service as these are not directly used for providing any service. It is used for erection / fabrication of Towers and the towers are used for providing output service. Towers being not qualified as 'Capital Goods' as per definition, parts / accessories of Towers cannot be said to be used for manufacture of capital goods and thereby cannot be fitted to the definition of input in terms of Rule 2(k) of Central Credit Rules, 2004. Accordingly, the dropping of demand on credit irregularly availed against 'Towers and parts & accessories of Towers' does not appear to be legal. (iv) The adjudicating authority has dropped the demand of Rs.6,68,37,663/- raised on irregular transfer of Cenvat Credit by ETR and ETP and availed & utilized by the assessee during the Financial Year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it, which is reproduced below for ready reference: 8. The said assessee is a provider of service under the category of 'Telecommunication Service' (hereinafter referred to as the said output service). A provider of output service is eligible for availing credit on duty of excise and service tax paid on 'capital goods, 'input' and 'input service' 'Towers & parts & accessories of Towers'. It is not the case that duty of excise has not been paid on the said goods but the allegation is that the said gods are not 'capital goods' as defined under Rule-2(a)(A) of the said Rules. If we go by the simple logic of Central Excise classification of the 'capital goods' as appearing in Rule-2(a)(A) (i), it is seen that the classification of the said goods falls under Chapter-73 of CETA' 85 and does not match with any Chapters mentioned in the said provisions. But this is not the exhaustive provision. If the said goods cannot be termed as 'capital goods', we can examine whether it satisfies the definition of 'input' as defined under Rule- 2(k) of the said Rules. Rule-2(k)(ii) of the said Rules is as under:- 'Towers and parts & accessories o Towers' are no doubt 'goods', for otherwise they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Eastern India. ETC & ETP receive inputs, capital goods and input services from various vendors and service providers. ETR & ETP transferred credit of Rs.6,68,37,663/- to the assessee through inter office memo called ATD/TED during the period 2005-06 and 2006-07. It is alleged that the credit is not admissible as ETR & ETP have not obtained registration as 'Input Service Distributor' as required under Rule-7A of the 'said Cenvat Credit Rules' and the documents on the basis of which credit has been availed are not the documents as prescribed under Rule 9 of the 'said Rules'. It is also alleged that all the inputs, capital goods and input services received by ETR and ETP could not be said to have been used by the assessee, as, in reference to the addresses mentioned in the bills where the materials were installed, it was readily identifiable as used and installed in premises throughout Eastern India other than the premises of the assessee. It is further alleged that during the material period, the said ETR and ETP did not provide any taxable service and/or manufactured any dutiable final products, and, accordingly, in terms of Rule 7 of the said Cenvat Credit Rules, 2004, credit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Rule-7A and Rule-9 of the said Rules. The credit amount of Rs.6,68,37,663/- has been sought to be denied on the basis of said allegation. I find that there is no allegation that duty of excise or service tax has not been paid on capital goods & inputs or input services and also there is no allegation of non use of the same in providing the said output service. The proposal of denial of credit is solely depending on the technical lapse. The said assessee has submitted that there was technical lapse during the relevant period and subsequently ISD registration was obtained in February'2009. They further submitted that their substantial right of availing credit cannot be taken away for technical lapse only. They have relied upon the decision of the Hon'ble CESTAT, Chennai in their case. I have examined the decision of the Hon'ble CESTAT, South Zonal Bench, Chennai in the case of M/s BSNL, salem Vs. CCE, Salem vide Order No. 1221/08. The relevant portion of the decision is given below:- "The CENVAT Credit in question has been denied on a technical ground. It is not in dispute that the capital goods were duty paid and that the credit o that duty was taken by SSA Salem by complyi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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