Inputs Used For Fabrication Of Tower, Shelter Used For Providing Telephone Services, BSNL Entitled To Avail Cenvat Credit: CESTAT
Mariya Paliwala
27 March 2024 10:00 AM IST
The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that inputs used for the fabrication of towers and shelters used for providing telephone services are entitled to BSNL cenvat credit.The bench of Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) has relied on the decision of the Delhi High Court in the case of Vodafone Mobile...
The Kolkata Bench of Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that inputs used for the fabrication of towers and shelters used for providing telephone services are entitled to BSNL cenvat credit.
The bench of Ashok Jindal (Judicial Member) and K. Anpazhakan (Technical Member) has relied on the decision of the Delhi High Court in the case of Vodafone Mobile Services Limited vs. . Commissioner of Central Excise, Jodhpur, in which it was held that the inputs used for the fabrication of towers and shelters, which are ultimately used for providing telephone services, are entitled to the cenvat credit as inputs or capital goods.
The appellant/assessee is in appeal against the order for denial of cenvat credit on various steel items used for setting towers, which were ultimately used for providing telephone communication service. The assessee is in the business of providing cellular telephone services and has availed himself of credit on channels, beams, angles, and shelters for setting up cell sites and erecting towers. Such towers are embedded into the earth.
The department was of the view that the same becomes immovable property, and the same are neither input nor capital goods for providing taxable output telecom services. The appellants are not entitled to avail the cenvat credit on the said items in terms of Rule 2(k) and 2(a) of the Cenvat Credit Rules, 2004.
The two show-cause notices were issued to the appellants to deny the CENVAT credit on the items. Accordingly, the orders are passed by denying the cenvat credit to the appellant and recovering it along with interest. A penalty is also imposed on the appellants.
The tribunal, while allowing the appeal, held that the appellant is entitled to avail of the CENVAT credit.
Counsel For Appellant: Payal Bharwani
Counsel For Respondent: P.K.Ghosh
Case Title: M/s Bharat Sanchar Nigam Limited Versus Commissioner of Central Excise & Service Tax, Bhubaneswar-I
Case No.: Service Tax Appeal No.76031 of 2015
