Case Law Details
Commissioner of Service Tax Vs Tata Teleservices (Maharashtra) Ltd (Bombay High Court)
Bombay High Court held that denial of cenvat credit to the telecom communication companies on towers used to rendering telecommunication service is sustained. However, duty demand of ineligible cenvat credit issued beyond the period of limitation as the issue was a debatable issue.
Facts- The Respondent assessee-M/s Tata Teleservices (Maharashtra) Ltd., was registered with the Service Tax Department, Mumbai for providing taxable services under the category of ‘Telecommunication Services’, etc.
During the course of enquiry, it was observed that the assessee had taken Cenvat Credit on goods like angles, channels, beams falling under Chapters 72 and 73 of the Central Excise Tariff Act, 1985 used to erect towers for installing transmission equipment. Similarly Cenvat Credit was also being availed on pre-fabricated buildings, shelters, PUF panels falling under Chapter heading 9406, which were used for housing/storage of generating sets and other components/equipments/spares etc.
According to the Revenue, since the telecom towers erected at site and affixed to earth were not goods, the activity of erection of towers did not amount to manufacture. That as the towers so erected were neither excisable goods nor any output service defined under the provisions of the Finance Act, 1994, they attracted neither levy of Central Excise Duty under the provisions of Central Excise Act, 1944 nor Service Tax under Finance Act, 1994. Any input or material used for erection of towers were not an input in terms of the provisions of Cenvat Credit Rules. The availment of Cenvat Credit by the notice on materials such as angles, channels, beam etc. therefore, appeared irregular and incorrect.
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