Customs, Excise & Service Tax Appellate Tribunal, Principal Bench, New Delhi, has on Friday, held that CENVAT is to be allowed on tower/ tower material and pre- fabricated building and shelters.
The aforesaid observation was made by the Tribunal when an appeal was filed before it by M/s/ Vodafone Mobile Services Limited, for setting aside the order dated February 22, 2017, passed by the Commissioner adjudicating twelve show cause notices, confirming the denial of CENVAT credit on inputs, input services and capital goods used by the appellant for provision of telecommunication services.
The demand of CENVAT credit along with interest being confirmed under rule 14 of the CENVAT Credit Rules, 2004, read with section 75 of the Finance Act, 1994, as well as penalties levied under rule 15 of the 2004 Rules read with sections 76 and 78 of the Finance Act, the appellant claims to have discharged service tax liability on its services, and despite being an output service provider, it pleads to be declared eligible for claiming CENVAT credit on inputs, input services and capital goods under the 2004 Rules.
The issue involved in the appeal being the eligibility of the appellant company to claim CENVAT credit on tower, tower material, shelter, input services for the period from October 2004 to March 2012 and April 2014 to March 2015, the Tribunal commented:
“Earlier, the Supreme Court in Triveni Engineering & Indus. Ltd. vs. Commissioner of Central Excise,had observed that while determining whether an article is permanently fastened to anything attached to the earth, both the intention as well as the factum of fastening have to be ascertained from the facts and circumstances of each case.
It would also be relevant to refer to the decision of the Supreme Court in Sirpur Paper Mills Ltd. vs. Collector of Central Excise, Hyderabad,wherein the Supreme Court observed that merely because a machine is attached to earth for more efficient working and operations, it would not per se become immovable property.
Further, in MallurSiddeswara Spinning Mills (P) Ltd. vs CCE, Coimbatore also, the Supreme Court has held that mere bolting of machine to a frame from which it can be unbolted and then shifted would not render the machine to be an immoveable property”
Thus, considering the facts and circumstances of the case, following the Delhi High Court decision in Vodafone Mobile Services and subsequently allowing the appeals of the appellants, Justice Dilip Gupta observed –
“This decision of the Delhi High Court in Vodafone Mobile Services has also been followed by the Tribunal in a number of decisions.It would, therefore, not be necessary to examine other contentions raised by learned Counsel for the appellant.
The order dated February 22, 2017 passed by the Commissioner, therefore, deserves to be set aside and the appeal is accordingly allowed”.
The aforesaid observation was made by the Tribunal when an appeal was filed before it by M/s/ Vodafone Mobile Services Limited, for setting aside the order dated February 22, 2017, passed by the Commissioner adjudicating twelve show cause notices, confirming the denial of CENVAT credit on inputs, input services and capital goods used by the appellant for provision of telecommunication services.
The demand of CENVAT credit along with interest being confirmed under rule 14 of the CENVAT Credit Rules, 2004, read with section 75 of the Finance Act, 1994, as well as penalties levied under rule 15 of the 2004 Rules read with sections 76 and 78 of the Finance Act, the appellant claims to have discharged service tax liability on its services, and despite being an output service provider, it pleads to be declared eligible for claiming CENVAT credit on inputs, input services and capital goods under the 2004 Rules.
The issue involved in the appeal being the eligibility of the appellant company to claim CENVAT credit on tower, tower material, shelter, input services for the period from October 2004 to March 2012 and April 2014 to March 2015, the Tribunal commented:
“Earlier, the Supreme Court in Triveni Engineering & Indus. Ltd. vs. Commissioner of Central Excise,had observed that while determining whether an article is permanently fastened to anything attached to the earth, both the intention as well as the factum of fastening have to be ascertained from the facts and circumstances of each case.
It would also be relevant to refer to the decision of the Supreme Court in Sirpur Paper Mills Ltd. vs. Collector of Central Excise, Hyderabad,wherein the Supreme Court observed that merely because a machine is attached to earth for more efficient working and operations, it would not per se become immovable property.
Further, in MallurSiddeswara Spinning Mills (P) Ltd. vs CCE, Coimbatore also, the Supreme Court has held that mere bolting of machine to a frame from which it can be unbolted and then shifted would not render the machine to be an immoveable property”
Thus, considering the facts and circumstances of the case, following the Delhi High Court decision in Vodafone Mobile Servicesand subsequently allowing the appeals of the appellants, Justice Dilip Gupta observed –
“This decision of the Delhi High Court in Vodafone Mobile Services has also been followed by the Tribunal in a number of decisions.It would, therefore, not be necessary to examine other contentions raised by learned Counsel for the appellant.
The order dated February 22, 2017 passed by the Commissioner, therefore, deserves to be set aside and the appeal is accordingly allowed”.
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