Central Excise – Rules 2(a), 2(k) and 3(1) of CENVAT Credit Rules, 2004 – Providing of telecommunication services – Usage of input services – Entitlement of Cenvat credit – Appellant is a provider of telecommunication services to customers – Appellant claims to have discharged service tax liability on such services – As a provider of output services, Appellant availed CENVAT credit on inputs, input services and capital goods under the Rules – Commissioner confirmed denial of CENVAT credit on ground that subject goods being attached to earth are immovable in nature and thus not used for providing output services – Whether Appellant is entitled to claim CENVAT credit on towers and pre-fabricated buildings/shelters – HELD - Rule 3(1) of the CCR, 2004 permits a provider of output service to take credit of excise duties paid on any ‘inputs’ and ‘capital goods’ – If an article is an immovable property, it cannot be termed as excisable goods – Installation or assembly of towers and shelters is based on a rudimentary “screwdriver” technology – Towers and shelters can be bolted and unbolted, assembled and re-assembled, located and re-located without any damage and fastening to earth is only to provide stability and make them wobble and vibration free – Machine or apparatus annexed to earth without its assimilation by fixing with nuts and bolts on a foundation to provide for stability and wobble free operation cannot be said to be one permanently attached to earth and therefore, would not constitute immovable property – In view of decisions referred to above, towers and shelters would not be immovable property – Towers and pre-fabricated shelters form an essential in provision of telecommunication service and therefore would qualify as ‘inputs’ under Rule 2(k) of the CCR, 2004 – Towers and shelters plainly act as components/parts and in alternative as accessory to BTS and are covered by definition of “capital goods” as defined in Rule 2(a) of the CCR, 2004 – Appellant would be entitled to claim CENVAT credit on tower/tower material and pre-fabricated buildings/shelters – impugned Order is set aside and appeal is allowed

Quick Search


Create Account

Log In

Forgot Password

Please Note: This facility is only for Subscribing Members.

Email this page

Feedback this page