Commissioner of Central Goods And Service Tax Vs Bharti Hexacom Limited (Rajasthan High Court)
The Rajasthan High Court dismissed an appeal by the Commissioner of Central Goods and Service Tax against Bharti Hexacom Limited, affirming that telecom towers and related materials qualify as capital goods for the purpose of availing CENVAT/GST input tax credit. The dispute originated from the respondent company’s claim of CENVAT credit on excise duty paid for mobile towers and tower materials during the period of September 1, 2004, to March 1, 2006. The adjudicating officer had raised a demand, invoking the extended period of limitation, which was subsequently overturned by the Central Excise Service Tax Appellate Tribunal (CESTAT). The CESTAT reasoned that conflicting views among High Courts at the time negated the possibility of concealment, thus precluding the application of the extended limitation period.
The High Court framed two substantial questions of law for consideration: whether the CESTAT erred in setting aside the demand for the extended period given the alleged absence of dispute regarding the inadmissibility of credit during the relevant period, and whether the CESTAT overlooked the fact that the assessee had not disclosed the details of the CENVAT credit availed to the department. However, the court noted that the core issue regarding the eligibility of telecom towers and pre-fabricated buildings as capital goods had been conclusively settled by the Supreme Court in the case of Bharti Airtel Limited vs. Commissioner of Central Excise. The Supreme Court had ruled that such structures are not immovable property and fall within the definition of capital goods, thereby qualifying for input tax credit. Consequently, with the substantive matter resolved in favor of Bharti Hexacom and against the department, the Rajasthan High Court deemed the questions concerning the extended period of limitation as no longer relevant and dismissed the appeal as infructuous.
