Telecom Towers and Shelters Qualify as Capital Goods, Vodafone Idea Entitled to CENVAT Credit: CESTAT [Read Order]
CESTAT held that towers and shelters qualify as capital goods and the assessee was eligible to claim CENVAT credit
![Telecom Towers and Shelters Qualify as Capital Goods, Vodafone Idea Entitled to CENVAT Credit: CESTAT [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/03/Capital-Goods-CENVAT-Credit-Vodafone-Idea-taxscan.jpg "Telecom Towers and Shelters Qualify as Capital Goods, Vodafone Idea Entitled to CENVAT Credit: CESTAT [Read Order]")
The Allahabad bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) held that telecom towers and shelters qualify as capital goods and observed that Vodafone Idea was entitled to claim cenvat credit. In this case, the appellant provides communications services and receives Cenvat credit. During the review of the appellant's record, it was discovered that the...
The Allahabad bench of the Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) held that telecom towers and shelters qualify as capital goods and observed that Vodafone Idea was entitled to claim cenvat credit.
In this case, the appellant provides communications services and receives Cenvat credit. During the review of the appellant's record, it was discovered that the appellant had claimed CENVAT credit for a variety of things, including 'Tower', 'Shelter', 'Electric Setup', electronic equipment, and prefabricated shelters.
To the displeasure of the appellant, Revenue deemed the Cenvat credit for these purchases inadmissible. The appellant was issued show cause notices and later proceeded with adjudication.
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The assessee’s counsel submitted that since the appellant reversed certain credits before the show cause notice was issued, the notice itself was unwarranted under Rule 73(3) of the Finance Act.
The tribunal relied on the decision of Bharti Airtel Ltd. V/s CCE, Pune SCC OnLine SC 3374 dated 20.11.2024 in which the Supreme Court observed that towers and shelters (PFBs) improve BTS/antenna efficiency and are classified as "capital goods" components/accessories under CENVAT Rule 2(a)(A). Because they are utilized to deliver mobile telecom services and received at the service provider's location, the assessees are eligible for CENVAT credit on excise duties paid.
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The Apex Court in the above-mentioned case also observed that ‘there cannot be any doubt that a mobile tower can be treated to be an accessory of antenna and BTS. Accordingly, since in terms of subclause (iii) of Rule 2(a)(A), all components, spares and accessories of such capital goods falling under sub-clause (i) Service Tax Appeal No.504, 1224 & 1257 of 2011 10 would also be treated as capital goods, a mobile tower can also be treated as “capital goods”.’
The CESTAT, comprising P. K. Chaudhary (Judicial Member) and Sanjiv Srivastava (Technical Member), held that towers and shelters qualify as capital goods and the assessee was eligible to claim CENVAT credit.
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