Custom, Excise & Service Tax Tribunal
Chitra Publicity Company Pvt Ltd vs Service Tax - Ahmedabad on 31 October, 2019
Customs, Excise & Service Tax Appellate Tribunal,
West Zonal Bench : Ahmedabad
REGIONAL BENCH - COURT NO. 3
Service Tax Appeal No. 755 of 2011
[Arising out of Order-in-Original No OIO-STC/41/COMMISSIONER/AHD/2011 dated
14.09.2011 passed by Commissioner (Appeal) of Central Excise & ST, Ahmedabad]
Chitra Publicity Company Pvt. Limited .... Appellant
Ashish, 2nd Floor, C G Road,
Swastik Char Rasta,
AHMEDABAD-GUJARAT.
VERSUS
Commissioner of Service Tax, Ahmedabad .... Respondent
7 th Floor, Central Excise Bhawan, Nr. Polytechnic CENTRAL EXCISE BHAVAN, AMBAWADI, AHMEDABAD, GUJARAT-380015 WITH Service Tax Appeal No. 757 of 2011 [Arising out of Order-in-Original No OIO-STC/41/COMMISSIONER/AHD/2011 dated 14.09.2011 passed by Commissioner (Appeal) of Central Excise & ST, Ahmedabad] Commissioner of Service Tax, Ahmedabad .... Appellant 7 th Floor, Central Excise Bhawan, Nr. Polytechnic CENTRAL EXCISE BHAVAN, AMBAWADI, AHMEDABAD, GUJARAT-380015 VERSUS Chitra Publicity Company Pvt. Limited .... Respondent Ashish, 2nd Floor, C G Road, Swastik Char Rasta, AHMEDABAD-GUJARAT.
APPEARANCE :
Shri Amal Dave, Advocate for the Appellant Shri L. Patra, Assistant Commissioner (AR) for the Respondent CORAM: HON'BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) HON'BLE MR. RAJU, MEMBER (TECHNICAL) 2 Service Tax Appeal No. 755 & 757 of 2011 FINAL ORDER NO. A/12021-12022 / 2019 DATE OF HEARING : 18.07.2019 DATE OF DECISION: 31.10.2019 RAMESH NAIR :
The brief facts of the case are that the appellant are engaged in the business of providing taxable service of Advertising Service as defined under Section 65(105)(e) of the Finance Act, 1994. The service of advertising agency is taxable with effect from 01.11.1996. For the purpose of advertising they fabricate and erect the hoarding boards on which the advertisement is displayed. For fabrication and erection of such hoarding boards, the appellant used MS Angles, Channels, GP Coils, Beams etc. on which they have availed Cenvat credit treating the same as inputs. The case of the department is that the appellant are not entitled for the Cenvat credit in respect of said steel goods. The Adjudicating Authority while denying the Cenvat credit referred to Rule 3(1) of Cenvat Credit Rules and definition in Rule 2(l) of Cenvat Credit Rules, 2004 i.e. for capital goods and also Rule 2(k) of Cenvat Credit Rules, 2004 and held that the steel items used are neither the capital goods nor inputs for providing output service. Therefore, appellant are not entitled for Cenvat credit. He also referred to Board Circular No. 13/90-CX.1 dated 18.04.1990, 53/2/98-CX dated 02.04.1998 and 58/1/2002-CX dated 15.01.2002 which clarified that civil structure are not excisable and are not chargeable to duty, therefore availment of Cenvat credit is not admissible. He also referred to Board Circular F. No. 137/315/2007-CX4 dated 26.02.2008 wherein it was clarified that angles, channels, beams etc. used for building transmission towers and for pre- fabricated buildings, shelters, PUF panels etc. cannot be called as excisable goods being attached to earth and are not chargeable to duty. The items 3 Service Tax Appeal No. 755 & 757 of 2011 such as channels, angles, beams etc. are inputs for civil structures and as such used for providing taxable service. The Board has viewed that credit of duty paid on such items are not available to telecom service providers.
2. The Adjudicating Authority heavily relied on the decision of this Tribunal in the case of Mundra Port & Special Economic Zone Limited vs. CCE, Rajkot - 2009 (13) STR 178 (Tri. Ahmd.) and after ascertaining in details, confirmed the demand of Cenvat credit amounting to Rs.
1,76,80,895/- along with demand of interest under Rule 14 of Cenvat Credit Rules, 2004 read with Section 73 of Finance Act, 1994. Penalty of equal amount was also imposed under Rule 15(4) of Cenvat Credit Rules, 2004. The demand of Rs. 1,73,22,415/-, for the period April 2005 to September 2009 was dropped and demand of Rs. 57,94,280/- for the period April 2005 to March 2007 was also dropped on the ground of time-barred. Being aggrieved by the impugned order, the assessee has filed this appeal and Revenue has also filed appeal to the extent of Cenvat credit of Rs. 57,94,280/- dropped on the ground to time-bar.
3. Shri Amal Dave, Ld. Counsel appearing on behalf of the appellant submits that the issue of Cenvat credit on the goods such as Angles, Channels, Beams etc. has now been settled. He submits that, earlier the cases were made out on the basis of Larger Bench decision in the case of Vandana Global Limited passed by the Larger Bench of the Tribunal. This judgment has been reversed by the Hon'ble Chhattisgarh High Court reported at Vandana Global Limited vs. CCE & Cus., Raipur - 2018 (16) GSTL 462 (Chhattisgarh). He submits that in the subsequent development on the legal issue, though the Tribunal in the case of Mundra Ports and 4 Service Tax Appeal No. 755 & 757 of 2011 Special Economic Zone Limited vs. CCE & Cus. (Tri. Ahmd.) denied the Cenvat credit however, the said order of the Tribunal was set-aside by the Hon'ble High Court and the credit was allowed in the identical set of facts. He submits that though there was adverse judgment by the Hon'ble Bombay High Court in case of Vodafone India Limited vs. CCE, Mumbai - 2015 (40) STR 422 (Bom.), however subsequently, in an absolutely identical issue, in the case of Vodafone Mobile Services Limited vs. CST, Delhi - 2018-TIOL- 2409-HC-DEL-ST, the Hon'ble Delhi High Court, after distinguishing the Hon'ble Bombay High Court judgment, having considered various judgments including the Mundra Ports & Special Economic Zone Limited (supra) held that steel and structures used for erection of telephone towers are admissible inputs for the purpose of Cenvat credit. He submits that with the judgment of Hon'ble Delhi High Court, the issue has finally been settled. Therefore, the credit is admissible to the appellant. He placed reliance on the following judgments:-
(a) Unit Ads Limited vs. C.EX. Cus. & ST. Hyderabad-II - 2016 (42) STR 547 (Trin. - Bang.)
(b) Aarti Industries Limited vs. C.Ex. ST. Surat-II - 2016 (335) ELT 775 (Tri. -Ahmd.)
(c) Sterlite Telelink Limited vs. CCE, Vapi - 2014 (312) ELT 353 (Tri.-
Ahmd.)
(d) Musaddilal Projects Limited vs. CCE & Cus, Hyderabad-l - 2017 (4) GSTL 401 (Tri. - Hyd.)
(e) Vodafone Mobile Services Limited vs. CST, Delhi 201 8-TIOL- 2409-HC-DEL-ST
(f) Vandana Global Limited vs. CCE & Cus. Raipur - 2018 (16) GSTL 462 (Chhattisgarh) 5 Service Tax Appeal No. 755 & 757 of 2011
(g) Mundra Ports & Special Economic Zone Limited vs. CCE & Cus. - 2015 (39) STR 726 (Guj.)
(h) Thiru Arooran Sugars vs. CESTAT, Chennai - 2017 (355) ELT 373 (Mad.)
4. Shri L. Patra, Ld. Assistant Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. He placed reliance on the following judgments:-
(a) 2015 (40) STR 422 (Bom) -- Vodafone India Limited vs. CCE, Mumbai-II
(b) 2016 (42) STR 249 (Tri-LB) -- Tower Vision India Pvt. Limited vs. CCE, (Adj.) Delhi.
(c) 2017 (52) STR 434 (Tri-Ahmd) -- Fascel Limited vs. CST, Ahmedabad
(d) 2015 (326) ELT 650 (Bom) -- Tigrania Metal & Steel Industries Pvt. Limited vs. CCE
5. We have carefully considered the submissions made by both sides and perused the record. The issue to be decided is that whether the appellant is entitled for the Cenvat Credit on steel items such as M.S. Angles/Channels/G.P. Coils/Beams etc., which were used for fabrication/ erection of structures on which hoarding boards are installed. From the perusal of record, we observe that after passing of the adjudication order, much water has flown on the issue of admissibility of Cenvat credit on the said items. Adjudication has relied upon the decision of Mundra Ports & Special Economic Zone Limited passed by the Tribunal Ahmedabad. The said judgment was reversed by the Hon'ble Gujarat High Court. On the 6 Service Tax Appeal No. 755 & 757 of 2011 same issue, the Hon'ble Bombay High Court, in case of erection, installation of Telecommunication Towers, demand against the assessee in the case of Vodafone India Limited (supra) has been maintained. However, in the case of Vodafone Mobile Services Limited (supra), Hon'ble Delhi High Court has given a contrary decision after distinguishing the Hon'ble Bombay High Court decision.
6. In view of the above, there are contrary judgments which have been delivered subsequent to passing of the impugned order. The issue of admissibility of Cenvat credit of in any case is a mixed question of law and facts which can be decided only on the basis of use of goods. Therefore, since there is so much development taken place after passing the adjudication order, we are of the view that Adjudicating Authority must reconsider the entire case in view of the facts of this case and considering various judgments passed by various High Courts. Therefore, we are of the considered view that in assessee's appeal, matter should go back to the Adjudicating Authority.
7. As regards the Revenue's appeal seeking setting aside the dropping of demand of Rs. 57,94,280/- on the ground of time-barred, we find that Adjudicating Authority dropped the said demand holding that in respect of such demand, there is no suppression of facts. The Adjudicating Authority has given the following findings:-
"44.2 I find from the copy of audit report F. No. RA-2/CERA/Nee. Ree./166/07-08 dated 19.11.2007 issued by the Deputy Audit Officer, CERA, Ahmedabad that there is no dispute to the fact that CERA audit for the period April 2002 to March 2007 had been conducted on the said assessee and no objection with regard to wrong availment of Cenvat credit on M.S. Angles/Channels/G.P. Coils/Beams was raised. The said fact has 7 Service Tax Appeal No. 755 & 757 of 2011 also been confirmed by the Superintendent Service Tax, AR-TI, Division-I, Ahmedabad vide his letter F.No.SD-O1/4-55/ST-3/AR-II/08-09/PT-1I dated 6.9.20 11 wherein it is reported that no show cause notice has been issued to the said assessee for wrong availment of Cenvat credit for the period from April-2005 to September-2009 on the basis of any CERA objection. Thus I find that the assessee had been given a clean chit by the CERA after audit of their records upto the period March-2007 as discussed above since no audit objection was raised by them. Thus I find force in the contention of the assessee that they cannot be held guilty of suppressing anything at. least till March 2007. I therefore find that suppression of facts for the period upto March 2007 cannot be alleged."
From the above findings, it is clear that CERA Audit has conducted audit of records of the appellant including the Cenvat credit record and no objection was raised. Therefore, there is absolutely no suppression of facts on the part of the appellant. Accordingly, we do agree with the above findings given by the Adjudicating Authority. The Adjudicating Authority has rightly set-aside the demand for the extended period for which the audit was conducted.
8. As a result, the assessee's appeal is disposed of by way of remand to the Adjudicating Authority and Revenue's appeal is dismissed.
(Pronounced in the open court on 31.10.2019) (Ramesh Nair) Member (Judicial) (Raju) Member (Technical) KL