Custom, Excise & Service Tax Tribunal
Tata Teleservices Ltd vs Commissioner Of Service Tax on 19 February, 2015
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,WEST ZONAL BENCH AT MUMBAI COURT No. I Appln. No.ST/MA(Ors)92633/15 & 92634/15 Appln.ST/S/93579/13, 93699/13, 95767/14, 95984/14 APPEAL No. ST/85793/13, ST/17/11, ST/85886/13, ST/87797/14, ST/87895/14, ST/366/10, ST/443/10, ST/435/11, ST/30/12, ST/85886/13, ST/85683/14, ST/85771, 85772, 85773, 85774, 85775 & 85776/14 (Arising out of Order-in-Original Nos.40-42/ST/SB/2012-13 dated 19/11/2012No.12 to 15/ST-II/KKS/2010 dated 07/10/2010, No.71/ST-II/RS/2013 dated 28/11/2013, No.76-81/ST-II/RS/2013 dated 29/11/2013, No.19-20/ST/RN/ CMR/MII/13-14 dated 22/02/2014, No.12/STC-I/BR/10-11 dated 04/06/2010, No.13-14-15/P-III/STC/ Commr/2011-12 dated 12/10/2011, No.31 to 34/ST/SB/2012-13 dated 30/10/2012 passed by Commissioner of Service Tax, Mumbai/Pune,) For approval and signature: Honble Mr.M.V. Ravindran, Member (Judicial) Honble Mr. P.R. Chandrasekharan, Member (Technical) 1. Whether Press Reporters may be allowed to see :No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it should be released under Rule 27 of the :Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether Their Lordships wish to see the fair copy :Seen of the Order? 4. Whether Order is to be circulated to the Departmental :Yes authorities? ========================================
Tata Teleservices Ltd., Tata Teleservices (Maharashtra) Ltd., Vodafone India Ltd., Idea Cellular Ltd., Vodafone Essar Ltd., Appellants Reliance Telecom Ltd., Reliance Communications Ltd., Vs. Commissioner of Service Tax, Mumbai/Pune Respondent Appearance:
Shri.V Sridharan, Sr. Advocate with Shri Ashish Philip for Idea Cellular Ltd.,Vodafone India Ltd., & Vodafone Essar Ltd., Shri Naresh Thacker, Advocate with Shri Gopal Mundhva, Shri Abhishek Jaju, Advocate for Reliance Telecom Ltd., and M/s.Reliance Telecommunications Ltd., Shri Sunil Gupta Sr. Advocate with Shri Mihir Deshmukh, Advocate for Tata Teleservices Ltd., Shri.D.Nagvenkar, Addl. Comm. (AR) for respondent CORAM:
Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. P.R.Chandrasekharan, Member (Technical) Date of Hearing : 18 & 19/02/2015 Date of Decision : /03/2015 ORDER NO Per: M.V. Ravindran
1. These two miscellaneous applications along with stay petitions and the appeals of all the appellants are taken up for disposal by this common order as the issue involved in these appeals is the same and arises out of similar facts.
2. The miscellaneous applications filed by one of the applicants/appellants, M/s.Tata Teleservices Ltd., is for producing additional evidences in support of their appeals as also raising additional grounds of appeal.
3. Learned Senior Advocate submits that the additional evidences, which are brought on record, are in form of experts opinion issued by the Professor of Indian Institute of Technology and that covers are immovable properties and inputs. In addition to the various case laws and also the photographs of the dismantling of towers, he would submit that they would also bring on record additional evidences in the form of agreement between M/s.Tata Teleservices Ltd., and Bhrati Airtel Ltd., for infrastructure sharing i.e., sharing of towers and cabins for rendering various services, i.e. Passive Infrastructure Sharing and it is his submission that the revenue earned by M/s.Tata Teleservices Ltd., is subjected to service tax under the category of Business Support Services, and he urges that the miscellaneous applications be allowed.
4. Learned DR objected to taking on record the additional evidences and grounds of appeal at this stage.
5. After giving due consideration to the submissions made by both the sides and on perusal of the additional evidences, the appellants/applicants wants to rely upon, we find that these additional evidences may be of help to the bench for coming to a conclusion on the entire issue. Accordingly, we allow the applications for bringing on record the additional evidences and will address to them in this order subsequently.
6. M/s.Tata Teleservices Ltd., (hereinafter referred to as TTL), M/s.Vodafone India Ltd., (hereinafter referred to as VIL), M/s.Idea Cellular Ltd., (hereinafter referred to as ICL), M/s.Vodafone Essar Ltd., (hereinafter referred to as VEL), M/s.Reliance Telecom Ltd., (hereinafter referred to as RTL) and Reliance Communications Ltd., (hereinafter referred to as RCL) have filed the following stay petitions and appeals:
S.No. Miscellaneous Application No./Stay Application No. Appeal No. Name of the party 01 ST/MA/(Ors)/92633/15 ST/85793/13 Tata Teleservices Ltd., 02 ST/S/93579/13 ST/85793/13 Tata Teleservices Ltd., 03 ST/MA/(Ors)/92634/15 ST/17/11 Tata Teleservices (Maharashtra) Ltd., 04 ST/S/93699/13 ST/85886/13 Vodafone India Ltd., 05 ST/S/95767/14 ST/87797/a4 Idea Cellular Ltd., 06 ST/S/95984/14 ST/87895/14 Vodafone Essar Ltd., 07 ST/366/10 Idea Cellular Ltd., 08 ST/443/10 Idea Cellular Ltd., 09 ST/453/11 Idea Cellular Ltd., 10 ST/30/12 Vodafone Essar Cellular Ltd., 11 ST/85886/13 Vodafone India Ltd., 12 ST/85683/14 Reliance Telecom Ltd., 13 ST/85771 to 85776/14 Reliance Communications Ltd.,
7. We dispose of the stay petitions filed by M/s.TTL, M/s.VIL, M/s.ICL and M/s.VEL. We find that the issue involved in these stay petitions is regarding denial of Cenvat credit to the appellants on the ground that the Cenvat credit availed on towers used for rendering telecommunication service is ineligible Cenvat credit as they are immovable goods. Since matters already listed for final hearing of the appeals of M/s.ICL, M/s.TTL, M/s.RTL and M/s.RCL, we dispose of the stay petitions filed by the applicants herein above and take up the appeals for final disposal.
8. The relevant facts that arise for consideration are being recorded separately, so as to deal with them in that order.
8.1 M/s.TTL herein were issued show-cause notices dated 22/04/2010, 07/10/2010 and 24/10/2011 directing them to show cause as to why the Cenvat credit availed by them on towers, towers parts, cabin, cabin parts, medi-claim services and goods other than towers, pre-fabricated buildings and shelters availed during the period April 2004 to March 2011 to be considered as ineligible and be not demanded along with interest and also directed them to show cause as to why penalties be not imposed on them. One of the show-cause notices was invoking extended period while other two show-cause notices are issued for the demands within the limitation period. The said show-cause notices were issued on scrutiny of Cenvat credit accounts maintained by M/s.TTL. It was noticed by the authorities that M/s.TTL has availed Cenvat credit under capital goods and subsequently under the inputs. M/s.TTL were informed that they are ineligible to avail the said Cenvat credit in response to which M/s.TTL defended their action due to which the lower authorities came to a conclusion that M/s.TTL had deliberately avoided in furnishing the details and mis-declaring about the eligibility to avail Cenvat credit on capital goods/inputs. The appellant, M/s.TTL contested the issue on merits, limitation and also put in various alternative submissions.
8.2 M/s.VIL & M/s.VEL were also issued show-cause notices dated 31/03/2009, 22/04/2010, 23/09/2010, 11/10/2011 and 12/10/2012 directing them to show cause as to why ineligible Cenvat credit availed should not be recovered from them as also interest and imposition of penalties. The period involved in these appeals is 2005 to 2006 and 2007 to 2008. The relevant facts are identical to the facts of M/s.TTL and it was alleged that M/s.VIL and M/s.VEL availed Cenvat credit on various towers/pre-fabricated buildings, etc., as capital goods even though the said goods did not fit into the definition of capital goods due to their nature and also due to non-receipt thereof in registered premises of the assesses. Both M/s.VIL and M/s.VEL contested the show-cause notices on merits as well as on limitation.
8.3 Identical issues are raised in the show-cause notices issued to M/s.ICL, M/s.RTL and M/s.RCL. These appellants also contested the issue on merits as well as on limitation before the adjudicating authorities. Adjudicating authority after considering the submissions of all the assesses herein above, did not agree with the contentions raised in defence of availment of Cenvat credit, the adjudicating authority confirmed the demands raised, along with interest and imposed penalties holding that the appellants herein had suppressed the fact of ineligibility to avail Cenvat credit and accordingly, the extended period was correctly invoked on merits the towers being immovable goods credit was held to be ineligible. All the appellants were held to have availed Cenvat credit wrongly and demands were confirmed against them along with interest and penalties were also imposed.
9. Learned Senior Advocate Shri Sunil Gupta along with Shri Mihir Deshmukh, Advocate appeared for M/s.TTL. Learned Senior Advocate Shri V Shridharan along with Mr.Ashish Philip, Advocate appeared for M/s.VIL, M/s.ICL and M/s.VEL. Learned Advocate Shri Naresh Thacker, Advocate along with Shri Gopal Mundhva and Shri Abhishek Jaju, Advocate appeared for M/s.RTL and M/s.RCL.
10. Learned Counsel appearing on behalf of M/s.TTL would submit that the confirmation of demand by the adjudicating authority is incorrect. He would then take us through the entire order-in-original as also the show-cause notices. He would then take us through the provisions of Cenvat Credit Rules, 2004 (hereinafter referred to as CCR), more specifically reads the provisions of Rule 2 & 3. He would submit that provisions of Rule 2 wherein the definition of capital goods and the definition of inputs, are more important. He would submit that the plain reading of Rule 2 (k) (ii) of the inputs as well as Rule 2 (a) of the capital goods definition would indicate that Cenvat credit of duty paid on the item is available for the assessee, who is providing taxable output services. He would submit that the definitions are wide in scope and simple and there is no ambiguity. He would submit that the appellants have claimed the Cenvat credit on the towers, pre-fabricated buildings and shelters as they are utilised by them for providing output service, i.e., telecom services. He would also submit that the appellant shares the infrastructure facilities as per statutory requirements with other telecom service providers and charged them some amount, which has been brought under service tax under the category of business auxiliary service and business support service. It is his submission that the infrastructure is used by the appellants for business support service or business auxiliary service for which the tax is discharged, hence Cenvat credit should not be denied. He would then submit that the departments objection to hold that towers and shelters upon erection and installation got converted into immoveable property and seems to be goods and become non-excisable is totally baseless; as these are also goods as Excise duty is paid on the towers. He would submit that the revenue has relied upon incorrectly on the judgement of the Honble High Court in the case of CCE, Bombay Vs. Hutchison Max Telecom P. Ltd., - 2008 (224) ELT 191 (Bom). He would also submit that the towers and shelters continue to remain goods from beginning to end and they never acquire the status of character of immovable property; they are subjected to excise duty in CKD/SKD condition and under Chapter 73 & 94 as the case may be; they never loose the character of goods on erection and installation of the equipment at site and there is no question of they got transformed from goods into immovable property for such a proposition he relies upon the following decisions:
i) CCE Vs Solid & Correct Engineering Works 2010 (252) EST 481 (SC)
ii) CCE Vs Globus Stores Pvt. Ltd., - (2011) 15 SCC 200
iii) Sirpur Paper Vs. CCE, Hyderabad (1998) 1 SCC 400
iv) Preumal Naicker Vs. T Ramaswami AIR 1969 (Mad.) 346
v) Shree Arcee Steel Vs. Bharat Overseas Bank AIR 2005 (Kar) 287
11. It is the submission of the learned Counsel that the reliance in the case of CCE, Bombay Vs. Hutchison Max Telecom P. Ltd., - 2008 (224) ELT 191 (Bom) is misconceived as in that case the question which has been answered is regarding the excise duty on the towers and shelters and not for eligibility to avail Cenvat credit. It is also his further submission that alternatively even if towers and shelters upon erection and installation turns into immovable property, thereby becoming non-excisable goods, there is no provision in the CCR for denying Cenvat credit on inputs which have been used for providing output service, on the ground that the erection or installation at site leads to an immovable property. It is his submission that it is well established that expression use is wide enough to include inputs in the final activities of manufacture or provision of services and credit cannot be denied on the ground that at some stage some immovable property is coming into existence; and the proposition is totally irrelevant and non-germane to the assessees entitlement to Cenvat credit as stipulated in CCR; condition of entitlement to the credit on the ground of use cannot be created by the revenue when non-existence in statute books. He relies upon the following judgements for these propositions:
i) Escorts Ltd., Vs. CCE, Delhi 2004 (171) ELT145 (SC)
ii) Shree Ramkrishna Steel Industries Ltd., Vs. CCE, Madras 1996 (82) ELT 575
iii) Sai Sahmita Storages Ltd., 2011-TIOL-863-HC-AP-CX
iv) SG Navaratna Highway - 2012-TIOL-1245
v) Laxmi Enterprises 2014 (9) TMI 35
12. Learned Counsel also submits that towers and shelters are used by them as a service provider for providing telecommunication service (output service) as also passive infrastructure service; this plea and factum of use of towers and shelters has not been contradicted as incorrect or rejected by the adjudicating authority. Learned Counsel would also submit that the adjudicating authority has wrongly equated use of inputs with being consumed or used for going into eligibility to avail Cenvat credit. It is also his submission that the adjudicating authority in the impugned order has wrongly read the explanation to Rule 2 (k) of the CCR while denying the benefit of Cenvat credit to the appellants on the ground that the inputs are not used by the appellant in the manufacture of excisable goods and hence they are not inputs. He would submit that in similar circumstances, this bench had an occasion to pass an order in the case of GTR infrastructure Ltd. Vs CST, Mumbai vide final Order No.S/1368/14/CSTB/C-I dated 11/07/2014. It is his submission that the adjudicating authority has wrongly considered various judgements which in respect of manufacturing facilities and evolution of the law needs to be considered. Learned Counsel would also submit that the department will rely upon the judgement of Bharti Airtel Ltd. Vs. CCE 2014-TIOL-1452-HC-MUM-ST to negate the arguments of the assessee. He would submit that Bharti Airtel Ltd., may not have any precedential value as the said judgement of the Honble High Court has not considered the provisions of Section 3 of Transfer of Property Act, 1882 read with expression immovable property in Section 3 of the General Clause Act, 1897. He would submit that these arguments were not raised in that case before the Honble High Court, which might have resulted in misdirection of the findings of the Honble High Court. He would then read the definition of immovable property in the Transfer of Property Act, as well as in the General Clauses Act, and submit that these very phrases have been interpreted by the various High Courts, which are in favour of the assessee, he relied upon the following cases:
i) MCD Vs. Gurnam Kaur (1989) 1 SCC 101
ii) State of UP Vs. Synthetic & Chemicals (1991) 4 SCC 139
iii) A-One Granites Vs. State of UP & Ors (2001) 3 SCC 537
iv) Haryana Financial Corporation Vs. Jagdamba Oil Mills (2002) 3 SCC 496
v) ICICI Bank Vs. Municipal Corporation (2005) 6 SCC 404
13. He would also rely upon the various other decisions for the proposition that there is no definition of immovable property in the statute. i.e. Central Excise Act and the Rules made thereunder. The interpretation given by the High Court in various decisions needs to be applied. Learned Counsel Shri Mihir Deshmukh, appearing on behalf of the TTL would also submit that the show-cause notice invoking extended period is incorrect in this case as the appellant had been always submitting the returns wherein Cenvat credit availment was indicated. He would also submit that the audit of the appellants records was undertaken and the issue was never raised. It is also his submission that one of the issues in these appeals is also regarding denial of Cenvat credit on the service tax paid on the medi-claim insurance of their employees. He would submit that the issue is now well settled and the appellant is eligible to avail Cenvat credit.
14. Shri V Sridharan, Senior Advocate appearing for M/s.VIL, ICL & VEL would submit that the arguments taken before the lower authorities in these bunch of cases are not properly addressed. It is his submission that the towers/shelters are movable inasmuch as that the said towers when they are re-located after dismantling and the shelters can also be dismantled and relocated. While supporting the arguments put forth by the learned Counsel for TTL, he would submit that the appellant herein were also rendering the services of business auxiliary services and the business support services for which the said towers are used for extending the services to various other telecom service providers. It is his submission that the said services which are provided by the appellant to other telecom agencies are under the statute and are mandated to be done so; hence, the services provided by them would fall under the category of infrastructure service provider. He would submit for providing such infrastructure services, Cenvat credit availed of the Central Excise duty on towers and shelters needs to be allowed; as these structures are essential for providing the output service either in the case of telecom service or as an infrastructure passive service provider. After explaining us the necessity of towers and shelters for providing such services, he would submit that on being joint with the towers and the cables, antenna, the entire equipments transforms into a cell site but the towers and shelters are movable. It is his submission that towers and shelters can be dismantled and relocated to other places while cell site cannot be relocated. For this proposition he relies upon the judgements of the Honble Apex Court in the case of Triveni Engineering & Industries Ltd. Vs. CCE 2000 (120) ELT 273 (SC) and read the said case. It is also his submission that on an identical issue in the case of BPL Mobile Communications Ltd., Vs. CCE 2006 (198) ELT 266 (Tri-Mumbai) and CCE, Bombay Vs. Hutchison Max Telecom P. Ltd., - 2008 (224) ELT 191 (Bom) an identical issue has been decided inasmuch as the product, i.e. cell site cannot be shifted without damages but various other items/components can be shifted. He also relied upon the decision of the Honble Supreme Court in the case of Seth Mathuradas Vs. CIT 1962 (44) ITR 517 (SC) and the CIT Vs. Brij Lal Lohia & Mahabir Prasad Khemka 1972 (84) ITR 273 (SC), Swaraj Mazda Ltd., Vs. CCE 1995 (77) ELT 505 (SC) are for the propositions that additional facts, which were placed before the lower authorities were not considered by the lower authorities while coming to a conclusion and it is his submission that in these cases the appellants had produced evidences regarding dismantling of towers and shelters and re-locating the same to other places. He would rely upon the affidavit which has been filed today before the Tribunal on this point. He would also distinguish the judgement of the Honble High Court of Bombay in the case of Bharti Airtel Ltd., (supra) and submit that the ratio of the case will not be applicable in the facts of this case. He would also submit that in any case extended period of limitation cannot be invoked in this case as the revenue authorities were aware of the Cenvat credit availment as well as utilisation thereof; records were audited by the authorities and there was no suppression on the part of the appellants and the appellants were being highly contested before the various forums. It is his submission that penalty be set aside, as the issue is a question of interpretation.
15. Shri Naresh Thacker, Advocate appearing on behalf of RTL and RCL would adopt all the arguments put forth by the senior counsel and hands over a chart indicating of demands in the cases of RTL and RCL. He would read the show-cause notice dated 17/11/2005 to show what is the case of the Revenue. As regards the RTC, it is his submission that there cannot be an allegation of suppression as the show-cause notice on an identical issue had been issued in respect of financial year 2006-07 and 2007-2008 by the Indore Commissionerate as well as Kolkatta Commissionerate as the appellant had locally registered themselves as service provider and availed the Cenvat credit on the towers/shelters. It is his submission that in the instant case, show-cause notices were issued invoking the extended period for the financial year 2006-2007 to 2009 to 2010 for demand; there cannot be any suppression of the facts when already the issue is in the knowledge of the department. It is also his submission that in peculiar circumstances in the show-cause notice issued to RTC, it invokes the extended period of limitation on the ground of suppression and raises demands for the years 2006-2007, 2008-2009, 2009-2010 and 2010-2011 but the demands for the period 2007-2008 has not been raised in the show-cause notice presumably for the reason that on the identical issue, show-cause notice has been issued by the Kolkatta Commissionerate as they were registered with service tax authorities there and subsequently, the appellant took centralized registration at Kolkatta, then shifted to Mumbai. He would rely upon the decision of the Honble Supreme Court in the case of Nizam Sugar Factory Vs. CCE, AP 2006 (197) ELT 465 (SC) for the proposition that extended period cannot be invoked when as an identical issue a demand has been raised. It is also his submission that no suppression of facts can be alleged if the assessee disclosed relevant information. He would submit that in the cases in hand, there is no suppression of any material fact that too with intent to evade payment of duty or non-disclosure of particulars which are not required to be disclosed by the assessee under statute. It is his submission that in the instant case, the appellant had regularly filed service tax returns disclosing the Cenvat credit availed in respect of capital goods, inputs and inputs services, in the absence of any statutory requirement to disclose the nature of capital goods or inputs and its functional utility in connection with the provisions of telecommunication services, appellant cannot be held as guilty of suppression of facts with intent to evade payment of duty; hence extended period invoked in these cases is incorrect. He would also submit that the computation of demand is also erroneous as the revenue has considered the amount for which demand is incorporated in the show-cause notice issued by Indore Commissionerate. As regards the RCL, it is his submission that on merits he is adopting all the arguments made by the Senior counsel. On limitation it is his submission that the appellants were issued draft audit para by the audit party intimating the appellant about the Cenvat credit on towers, pre-fabricated buildings, etc., on conducting audit of its records for the period 01/04/2004 to 30/09/2006. He would submit that draft audit observations after the audit was communicated to appellant by letter dated 23/02/2007 which was replied by the appellants on 20/03/2007, wherein the appellant gave a detailed explanation and followed up the same by a letter dated 11/06/2007 explaining therein how they are eligible to avail Cenvat credit on the goods i.e., towers and shelters. He would then draw our attention to the final audit report which has been issued to the appellants vide letter dated 19/10/2007 and submits that though the draft audit observations communicated to the appellants on 23/07/2007 indicated that the appellant had possibly availed ineligible Cenvat credit on the towers and shelters, but the final audit report dated 19/10/2007 did not contain the allegations on improper availment of Cenvat credit on towers and shelters. It is his submission that in the light of the factual position, extended period invoked for the demands of the Cenvat credit is incorrect as in October 2007 itself the audit parties have dropped the objections in respect of ineligible Cenvat credit availed on towers and shelters.
16. Learned Additional Commissioner (AR), after taking us through the various provisions of the Cenvat Credit Rules, submit that all the submissions made by the Counsel for the appellants is incorrect. He would submit that the towers and shelters are immovable properties and hence Cenvat credit cannot be allowed. He would submit that similar issue was decided by the Tribunal in the case of Mundra Port & Special Economic Zone Ltd., Vs. CCE, Rajkot 2009 (13) STR 178 (Tri-Ahmed) and also in the case of Gujrat State Petronet Ltd., Vs. CCE, Ahmedabad 2013 (32) STR 510 (Tri-Ahmed). It is his submission that in these two cases, the Tribunal has categorically held that once the goods become immovable, Cenvat credit cannot be availed on the inputs which are concerned have brining into existence, the structures though they may be used for providing taxable output services. It is his submission that the judgement of the Honble High Court of Bombay in the case of Bharti Airtel Ltd., (supra) would squarely covers the issue and he would read relevant paragraph which are;
Secondly, the expression telecommunication network was being considered in the context of Section 8(1) read with section 8(3)(b) of the Central Sales Tax Act. It was also observed that in the case of State of Andhra Pradesh Vs. Bharat Sanchar Nigam Ltd. (supra) ruling of the Division Bench of Andhra Pradesh High Court, it was held that telecommunication tower is immovable property and that it being a immovable property must have direct relevance to the issue as arising for adjudication in the said case. In the present case the issue is one which falls under the Credit Rules and as to whether towers and parts thereof fall within the scope and ambit of the specific definition of Capital goods and the definition of inputs under the Credit Rules,2004. Any issue falling for interpretation under the provisions of Section 8(1) and Section 8(3)(b) and 8(1) of the Central Sales Tax cannot ipso facto be made applicable in the context of the Credit Rules as arising in the present appeals and more particularly, when the definition as falling under the Cenvat Credit Rules are distinct and are noticeably different.
(g) The decision of the Supreme Court in Collector of C.E. Vs. Jay Engineering Works Ltd., (1989(39) E.L.T. 169(S.C.) concerned the nameplate affixed on a fan which was held as an as an input and an essential ingredient failing which the fan does not become marketable and covered by a notification entitling the manufacturer for set off duty on the nameplates. This decision however is ex-facie not applicable in the present context.
(h) The reliance of the appellant on the judgment of the Division Bench of this Court in the case of Deepak Fertilizers & Petrochemicals Corpn. Ltd. Vs. C.C.E., Belapur, (2013(288) E.L.T. 316(Tri.-Mumbai)) would also be of no assistance to the appellant. The appellant relied on the following observations in paragraph (5) of the judgment.
The Tribunal has placed an interpretation which runs contrary to the plain and literal meaning of the words used in Rule 2(1). Moreover, as we have noted earlier, where as Rule 3(1) allows a manufacturer of final products to take credit of excise duty and Service Tax among others paid on any input or capital goods received in the factory of manufacturer of the final product, insofar as any input service is concerned, the only stipulation is that it should be received by the manufacturer of the final product. This must be read with the broad and comprehensive meaning of the expression input service in Rule 2(1). the input services in the present case were used by the appellant whether directly or indirectly, in or in relation to the manufacture of final products. The appellant, it is undisputed, manufactures dutiable final products and the storage and use of ammonia is an intrinsic part of that process. However, the observations are required to be read in the context of the facts of the said case. The appellant the said case was engaged in manufacturing of excisable goods which fell under Chapters 28, 29 and 31 of the Central Excise Tariff Act,1985. The appellant had installed storage tanks for storing ammonia at its premises situated at JNPT and had claimed that it is eligible for Cenvat Credit of service tax paid on input services used for the ammonia storage tanks installed at JNPT so that input/ raw material stored therein was intended for manufacture of the final product at the factory of the appellant at Taloja. The Cenvat Credit in respect of the services of consulting engineers, technical inspection and certification, construction, erection, commissioning and installation services for the installation of the ammonia storage tanks was claimed. The facts of this case can no manner apply to towers and parts thereof, prefabricated building/shelter which are immovable property and not excisable goods and hence, reliance on this judgment is misconceived
(f) In the Division Benchs judgement of this Court in the case of Bharti Tele-Ventures Ltd. and Sunil Bharti Mittal Vs. State of Maharashtra, (2007 Vol.109 (1) Bom.L.R.0595) the issue was whether the construction of cell sites and erection of towers is included in building and/or development within the meaning of Maharashtra Regional and Town Planning Act, 1966 (for short MRTP Act) or other Corporations Act. The issue arose in the context of a Notification dated 04/07/2005 issued by the Government of Maharashtra under Section 154 of the MRTP Act by which the Government of Maharashtra had sought to amend its earlier order dated 09/10/1996 thereby authorizing various Municipal Corporations in the State to charge retrospectively from 09/10/1996 a premium at the rate of land value as per the ready reckoner for the area occupied by the cabin, the tower for granting permission under Section 45 of the MRTP Act to the petitioners for installing the semi permanent structures/cabins on the top of the building for housing base station/telephone connector to set up a cellular mobile telecommunication system. In this context the Division Bench in interpreting the provisions of MRTP Act and considering the nature of cabins and the towers in paragraph 26 has observed as under:
26..At the same time, the tower and the cabin would be within the meaning of the building as well as the development under the BPMC Act (including other Corporation Act) and the MRTP Act respectively. The expression development under the MRTP Act clearly includes erection of any structure as well as any material or structural change in the building or its precinct. The term precinct would refer to the area adjacent as well as adjoining the building.
(g) In the case of Municipal Corporation of Greater Bombay and others Vs. Indian Oil Corporation Ltd., (1991 Supp (2) Supreme Court cases 18, the issue which fell for consideration before the Supreme Court was as to whether storage tanks for petroleum products are land within the meaning of Section 3 . or buildings as defined under Section 3 (s) of the Bombay Municipal Corporation Act, 1988 and are exigible to property tax. It was held that the petroleum storage tanks are structures or things attached to the land and were exigible to the property tax. In paragraphs 32 and 33 it was observed as under:
(h) In the case of Cellular Operators Association of India and Ors. Vs. Municipal Corporation of Delhi etc., (179 (2011) DLT 381), in the context of levy of fee by the Municipal Corporation of Delhi for grant of permission for installation of temporary structures/towers on roof tops for providing Cellular Basic Mobile Phone Services, the learned Single Judge of the Delhi High Court held that cellular towers would fall within the definition of buildings and hence, the Municipal Corporation of Delhi had jurisdiction not only to prohibit installation/erection of such towers without its permission and that such installation requires approval. In paragraphs 38 and 40 the learned single judge has observed thus:-
..
17. He would submit that the judgement of the Honble High Court of Andhra Pradesh in the case of State of Andhra Pradesh Vs. Bharat Sanchar Nigam Ltd., - 2012 (25) STR 321 (AP) would squarely apply this case as their Lordships categorically recorded that towers and shelters would fall under the category of immovable property and not goods. While responding to the submission made by the learned Counsel he would submit that reliance placed by the Senior Counsel for TTL regarding the experts opinion of IIT Professor, it is nothing but in form of question and answers and is like reading a book. It is his submission that no relevant details on which reliance is placed upon is indicated by the expert in his opinion nor there is any reference to technicalities/details, hence the information cannot be considered as an expert opinion. It is also his submission that the views expressed by the expert opinion on the immovability aspects on the towers is totally unexplained and without any technical details. Subsequently, he reads the infrastructure sharing agreement between the TTL and others and submit that it is clearly spelt out what is being shared is nothing but and is an immovable property. On GTL infrastructure Ltd., it is his submission that it cannot have any precedential value in the case in hand. Subsequently, he would distinguish the various judgements relied upon by the Counsel and submit that when there is a direct judgement of the jurisdictional High Court, the same needs to be followed. As regards the limitation, he would submit that Rule 9 of CCR mandates that availment of credit and correctness thereof is the responsibility of the assessee. He would submit that burden to prove as to the eligibility and correctness of the Cenvat credit availed lies on the assessee taking credit. While at least in the case of TTL the assessee had argued before the Honble High Court that the goods were immovable property, if that be so, how they can claim limitation today. It is his submission that in the case of TTL as well as others special audit or audit which has been conducted cannot be held to be a relevant factor for non invocation of extended period.
18. We have considered the submissions made by both the sides at length and perused the records.
19. The issue involved in these cases is regarding the eligibility to avail Cenvat credit on the towers and pre-fabricated buildings/shelters; and as to whether the appellants are to be saddled with the demands of reversal of Cenvat credit by invoking extended period or otherwise and whether penalties are to be imposed on them or not ?
20. The undisputed facts are that the appellants are providers of telecom/cellular services. They are discharging service tax liability on the output service, i.e., telecom/cellular services. The towers and pre-fabricated buildings/shelters, which were received by the appellants herein are Central Excise duty paid. The appellants had availed Cenvat credit considering them as either capital goods or inputs and utilised the said credit for discharge of service tax liability on the output service telecom services. Another undisputed fact is that the appellants herein are also extending the facility of these towers and shelters to various other telecom service providers from whom they are receiving some consideration on which all the appellants are discharging service tax liability under the category of business auxiliary service or business support service.
21. On this factual background, it was argued that Cenvat credit availed on the towers and the shelters is eligible to the appellants mainly on the ground that the towers and shelters are nothing but goods which are used for providing output service. Reliance was placed on the provisions of Cenvat Credit Rules, 2004 to drive home the points. On perusal of the relevant rules, we find that the said rules do provide for availment of Cenvat credit on capital goods as well as inputs. In the cases in hand we find that the towers and shelters, which were received by the appellants at site were not capital goods in the form as they were received, inasmuch as they were covered under Chapter 73, the pre-fabricated shelters were covered under Chapter No.94. The definition of capital goods do not include these two chapters in the scope, for the eligibility to avail Cenvat credit. As regards the arguments that these can be inputs we find that definition of inputs may be wider as has been argued by the Counsel for the appellants, but the inputs which are used for providing output service is the link which has not been established in these cases by the appellant. In our considered view, the ratio of the decision of the Honble High Court of Bombay in the case of Bharti Airtel Ltd., (supra) as regards the eligibility to avail Cenvat credit would be directly applicable in all these cases. In the said case the Honble High Court had formulated the substantial question of law which reads as under:
Whether in facts and circumstances of the case, the Appellate Tribunal was correct and justified in holding that the Appellant was not entitled to credit of duty paid on tower parts, green shelter on the ground that tower/green shelter is immovable property and hence, do not quality as capital goods or inputs as defined under the Cenvat Credit Rules, 2004? Whether in the facts and circumstances of the case, the Appellate Tribunal was correct and justified in holding that tower would not qualify as part or component or accessory of the capital goods, i.e. antenna ?
22. Their Lordships after considering all the detailed submissions made by the counsel before them and considering various case laws, came to a conclusion that Cenvat credit cannot be availed by the appellant therein either under the category of capital goods or inputs on the towers or pre-fabricated buildings. The relevant paragraphs wherein the Lordship have recorded the ratio are as under:
30. In the decision of "Simbhaoli Sugar Mills Ltd. v. Commissioner of Central Excise, Meerut, (2001 (135) ELT 1239 (Tri-Del), the appellant was a manufacturer of sugar and availed a MODVAT credit on the joints, channels, angles and MS Beams used in fabricating supporting structures for installation of equipments such as vacuum pan, crystallizers, sugar grader, elevator, etc., HR plates (black steel) are used in boiler of sugar plant to keep temperature high, MS bars, shapes and sections are used for erection of new cooling tower, chequred plates and ITR plates are used to construct the platforms, the cane carrier chain and spares are used to transfer the raw material/semi processed material from stage to other, as the capital goods in the terms of Rule 57Q, treating these items as the parts and components of the plant. The question which arose before the Tribunal was that whether these items used for fabricating structures to support and install various machineries of the sugar plant are capital goods in terms of the Rule 57Q. The Tribunal while allowing the MODVAT credit found that these items, except MS sections and shapes, used for raising structure to support the various machines, parts of machineries of the plant would be covered by the explanation to Rule 57Q as capital goods. The Tribunal referred to its own decision in Malavika Steel Limited's case and without semblance of any discussion, has partly allowed the assessee's appeal. In view of our findings and the conclusion in the earlier part of the judgment, we cannot agree with the reasoning of the Tribunal. The reliance of the aforesaid judgment on behalf of the Revenue is quite appropriate. The enunciation of law as laid down in the judgment clearly goes to show that the towers are immovable property and non excisable and hence, can neither be regarded capital goods so as to fall within the definition of capital goods appearing in Rule 2(a) of the Credit Rules, nor can be categorized as input applying Rule 2(k) of the Credit Rules.
31. In the light of the aforesaid discussion we examine whether on the rules as they stand the appellants would be entitled to the credit of the duty paid on the item in question on the output service namely the cellular service. We may observe that a plain reading of the definition of capital goods' as defined under Rule 2(a)(A) of the Credit Rules show that all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading No.6805, grinding wheels and the like, and parts thereof falling under heading 6804 of the First Schedule to the Central Excise Tariff Act; pollution control equipments; components, spares and accessories of the goods specified at sub clauses (i) and (ii) which are used either in the factory for manufacture of final products but does not include any equipment or appliance used in the office and those used for providing service. Further in the CKD or SKD condition the tower and parts thereof would fall under the chapter heading 7308 of the Central Excise Tariff Act. Heading 7308 is not specified in clause (i) or clause (ii) of rule 2 (a)(A) of the Credit Rules so as to be capital goods. Further the Appellants contention that they were entitled for credit of the duty paid as the Base Transreceiver Station (BTS) is a single integrated system consisting of tower, GSM or Microwave Antennas, Prefabricated building, isolation transformers, electrical equipments, generator sets, feeder cables etc. and that these systems are to be treated as composite system classified under Chapter 85.25 of the Tariff Act and be treated as 'capital goods' and credit be allowed, also is not acceptable. It is clear that each of the component had independent functions and hence, they cannot be treated and classified as single unit. It is clear that all capital goods are not eligible for credit and only those relatable to the output services would be eligible for credit. The goods in question in any case cannot be held to be capital goods for the purpose of CENVAT credit as they are neither components, spares and accessories of goods falling under any of the chapters or headings of the Central Excise Tariff Schedule as specified in sub-clause (i) of the definition of capital goods. Hence a combined reading of sub-clause (a)(A) (i) and (iii) and sub-rule (2) indicates that only the category of goods in Rule 2(a)(A) falling under clause (i) and (iii) used for providing output services can only qualify as capital goods and none other. Admittedly the goods in question namely the tower and part thereof, the PFB and the printers do not fall within the definition of capital goods and hence the appellants cannot claim the credit of duty paid on these items. Even applying the ratio of the judgments as relied upon by the appellants as observed above the said goods in the present context cannot be classified as capital goods.
32. As regards second contention of the appellants that the tower and part thereof, the PFB and the printers would also falls under the definition of input as defined Rule 2(k) also cannot be sustained. The definition of inputs as defined under rule 2(k) includes all goods, except light diesel oil, high speed diesel oil, motor spirit, commonly known as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or not and includes lubricating oils, greases, cutting oils, coolants, accessories of the final products cleared along with the final product, goods used as paint, or as packing material, or as fuel, or for generation of electricity or steam used in or in relation to manufacture of final products or for any other purpose, within the factory of production, and as provided in sub-clause (ii) all goods except light diesel oil, high speed diesel oil, motor spirit, commonly known as petrol and motor vehicles, used for providing any output service. Explanation (2) of sub-rule (k) is also which provides that input include goods used in the manufacture of capital goods which are further used in the factory of the manufacturer. A plain reading of the definition of input indicates that in the present context, clause (i) of Rule 2 (k) may not be of relevance as same pertains to manufacturing activity and pertains to goods used in relation to manufacture of final product or any other purpose within the factory of production. Sub-clause (ii) has been referred to as relevant by the appellant as the same pertains to goods except light diesel oil, high speed diesel oil, motor spirit, commonly known as petrol and motor vehicles, used for providing any output service. Tower and parts thereof are fastened and are fixed to the earth and after their erection become immovable and therefore cannot be goods.
34. We therefore find no infirmity or illegality in the findings as recorded by the tribunal in holding that the subject items are neither capital goods under Rule 2(a) nor inputs under Rule 2(k) of the Credit Rules and hence CENVAT credit of the duty paid thereon was not admissible to the appellants. The appeals are devoid of merit and accordingly stand rejected. No orders as to costs.
23. It can be seen from the above reproduced ratio that the issue is now squarely covered by the decision of the jurisdictional High Court, which is binding on us and is in favour of Revenue.
24. Learned Counsel for the appellants were trying to distinguish the ratio of the Honble High Courts judgement in Bharti Airtel Ltd., on the ground that judgement has considered the towers and pre-fabricated buildings as immovable and hence are not eligible for availing Cenvat credit. It was also demonstrated before us with the help of photographs that towers and shelters were in fact movable and were moved as has been indicated in the affidavit and various other submissions made. In our considered view, these arguments of the learned counsel would not carry their case ay further. In our considered view, the immovable property which comes into existence at time even it is subsequently dismantled or disassembled and shifted to other places would be having the same characteristic as it was having earlier. In our considered view, judgement of the High Court of Bombay in the case of Bharti Airtel Ltd., has specifically considered this issue in para (f) wherein their Lordship reproduced the ratio of the judgements of the Honble High Court in the case of State of Andhra Pradesh Vs. Bharat Sanchar Nigam Ltd. 2012 (49) and observed that telecommunication towers are held to be immovable property. We further reproduce the relevant paragraphs of the judgement in the case of BSNL.
The Telecommunication tower, of a height of around 90 metres and embedded either to the earth or to the roof top of a building, is under the control and possession of the passive service provider. The manner in which this 90 metre huge structure is fastened would necessitate its being excluded from the ambit of goods, and included within the category of immovable property. Transfer of the right to use immovable property would not fall within the ambit of Section 4(8) of the Act as immovable property is excluded from the definition of goods under Section 2(16) of the Act. Section 3(26) of the General Clauses Act, 1897 includes, within the definition of the term immovable property, things attached to the earth or permanently fastened to anything attached to the earth. Section 3 of the Transfer of Property Act gives the following meaning to the expression attached to the earth : (a) rooted in the earth, as in the case of trees and shrubs; (b) imbedded in the earth, as in the case of walls or buildings; or (c) attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached. The question whether a chattel is imbedded in the earth so as to become immovable property is to be decided on the principles of annexation to the land. The twin tests are the degree or mode of annexation, and the object of annexation. [Solid and Correct Engineering Works v. CCE - (2010) 5 SCC 122 = 2010 (252) E.L.T. 481 (S.C.)]. From a combined reading of the definition of immovable property, in Section 3 of the Transfer of Property Act and Section 3(26) of the General Clauses Act, it is evident that, in an immovable property, there is no mobility. The test of permanency is whether the chattel is movable to another place of use in the same position, or is liable to be dismantled and re-erected at the latter place? If the answer is yes to the former it must be a movable property and, thereby, it must be held that it is not attached to the earth. If the answer is yes to the latter, it is attached to the earth. [T.T.G. Industries Ltd. v. CCE - (2004) 4 SCC 751 (DB) = 2004 (167) E.L.T. 501 (S.C.); Ad Age Outdoor Advertising Private Limited, Hyderabad v. The Government of Andhra Pradesh - Judgment of APHC DB in W.P. No. 23811 of 2009 dated 11-2-2011]. The 90 metre huge tower can only be erected at another place after it is completely dismantled at the existing site, and cannot be moved to another place of use in the same position. The telecommunication tower is, therefore, immovable property and not goods liable to tax under the Act.
25. In view of the fact that two High Courts have already held that towers would become immovable property, the argument which was led by the learned Counsel that the Honble High Court of Bombay has not considered the definition of immovable property as it is envisaged in the Transfer of Property Act and General Clauses Act, is incorrect and will not carry the case of appellants any further.
26. Another point which was argued by the learned Counsel for the appellants was on erection of towers and pre-fabricated buildings/shelters and interconnecting them with various wires brings into existence of a complete unit called as cell site. It was the submission that the cell site would become immovable property as has been laid down by the Honble Apex Court in the case of Triveni Engineering & Industries Ltd. and this cell site cannot be shifted as such but towers and pre-fabricated buildings can be done so by dismantling.
27. We find no merits in this argument as the Honble Apex Court in the case of Triveni Engineering Industries case was considering an issue of excisability of the plant and machinery wherein generator and turbine were connected to form a functional power plant. In the case in hand, we are concerned with the eligibility to avail Cenvat credit on the towers and pre-fabricated buildings/shelters which is covered by the direct decision of the jurisdiction High Court in the case of Bharti Airtel Ltd.
28. Learned Counsel argued that the Cenvat credit availed on the towers and pre-fabricated buildings/shelters are to be allowed to them on the ground that they have been providing output service of infrastructure facilities to various other telecommunication service providers. It is the submission that if they are providing services under the infrastructure service, which in these cases is called passive telecom infrastructure. They relied upon the decision of the Honble High Court of Andhra Pradesh in the case of Sai Sahmita Storages Ltd., SG Navaratna Highway and GTL Infrastructure Ltd. (supra) to submit that if immovable property comes into existence but used for providing services on which tax is payable, Cenvat Credit cannot be denied on the inputs. They would also rely upon the judgements of this Bench in the case of GTL Infrastructure Ltd., for the proposition. We gave an anxious consideration on the submissions made on this point. In our considered view, we find arguments put forth by the learned Counsel needs to be rejected at the out set itself, inasmuch as the first and foremost in all these three cases, the issue before the Honble High Court and the Tribunal was that the appellants therein were providers of storage and warehousing services; immovable property service and business auxiliary service, for which they need to have infrastructure in its place. In the cases in hand, with which we are dealing with are the telecommunication companies providing cellular services, we find that basically all the appellants herein are providers of telecommunication/cellular services and the facility created by them in form of towers and pre-fabricated buildings are for their own use. Predominantly, the towers and pre-fabricated buildings/shelters were utilised by the appellants herein for rendering their own telecom/cellular services. In view of this ratio laid down in the case of Sai Sahmita Storages Ltd., SG Navratna and GTL infrastructure Ltd., (supra) may not apply, as the facts in those cases are totally different than the facts in these bunch of appeals. Be that as it may, we find that as the issue involved in this case is covered by the direct judgement of the jurisdictional High Court, judicial discipline demands that ratio of jurisdictional High Court is to be followed by this Bench.
29. In one of the appellants case i.e., TTL one more argument was of a demand of the ineligible Cenvat credit includes the Cenvat credit availed on service tax paid to the insurance companies for group insurance of the employees. We find that this part of the denial of Cenvat credit of the appellants, (TTL) is not in consonance of the law as has been settled on the issue, as there is no dispute that such insurance was for employees, to that extent the appeal of TTL needs to be allowed.
30. All the appellants herein have assailed the orders of the adjudicating authority on limitation at least in respect of one show-cause notice in each case, wherein extended period was invoked. We find strong force in the contention raised by the learned Counsel. We find in the case of TTL, RIL, RCL various audits took place and the said audit report did not indicate any error in availing the Cenvat credit on towers, pre-fabricated buildings and shelters. In the case of Vodafone Essar Ltd. and Idea Cellular Ltd., we find that arguments put forth are the same that they are availing Cenvat credit, utilised the same and had informed the department about their activity in the ST-3 returns. It is also noted that the issue of availment of Cenvat credit on the towers and pre-fabricated buildings and shelters was being disputed before the various forum and hence all the appellants could have entertained a bonafide belief that they were eligible to avail Cenvat credit of duty paid on towers and pre-fabricated buildings/shelters.
31. In our view the law as to invocation of extended period for demand of tax is well settled. In T.N. Dadha Pharmaceuticals Vs. CCE Madras 2003 (152) ELT 251, the Honble Apex Court held that three requirements have to be cumulatively satisfied for invoking extended period while observing as under:
A perusal of? the proviso, extracted above, makes it clear that where duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any willful mis-statement or suppression of facts, or contravention of any of the provisions of the Central Excise Act or of the rules made thereunder with intent to evade payment of duty by such person or agent, the period of limitation of one year in the main section is substituted by the words five years. In other words, where the said proviso is attracted the duty etc. can be claimed even after expiry of one year for an extended period of five years from the date of the demand. To invoke the proviso three requirements have to be satisfied, namely, (1) that any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded; (2) that such a short-levy or short-payment or erroneous refund is by reason of fraud, collusion or willful mis-statement or suppression of facts or contravention of any provisions of the Central Excise Act or the rules made thereunder; and (3) that the same has been done with intent to evade payment of duty by such person or agent. These requirements are cumulative and not alternative. To make out a case under the proviso, all the three essentials must exist. (emphasis supplied) It would therefore, be necessary to establish whether all the three requirements are cumulatively exist in the instant case as laid down by the Apex Court. No collusion, fraud, misstatement, suppression of facts or contravention of any statutory provisions or rules made there under, with intent to evade payment of duty is forthcoming these cases. It is evident and not in dispute that not only returns were filed periodically but audit was also conducted by the department. Even in the audit through returns were available, issues raised herein were not raised in few cases. In one of the cases Tribunal cannot lose the sight of the vital fact that final audit report during the concerned period did not indicate wrong availment of Cenvat credit on towers and pre-fabricated buildings. The omission which is subsequently alleged therefore, cannot be said to be beyond the departments knowledge. The facts in all these cases clearly show that appellants conduct was bonafide and there was no design to commit any fraud or to evade any duty. The issue is mainly of interpretation without involving suppression of material facts with intent to evade duty. In all these cases it is not the case of revenue that appellants have failed to disclose any material information which was statutorily prescribed to be disclosed in their periodical returns. In our view once the assessee has regularly filed service tax returns disclosing all the requisite particulars and additionally even audit has taken place, allegation of suppression of facts with intent to evade duty cannot be sustained. It was for the authorities to properly verify the returns and seek information or put queries, if not done so assessee cannot be penalised and more so with allegation of suppression of facts. In all these cases the appellants have not failed to disclose any particulars which were legally required to be disclosed and revenue also did not ask any further details during the relevant period as to the issue. We find that judgement of Honble High Court of Bombay in the case of Rajkumar Forge Ltd., Vs. UOI 2010 (262) ELT 155 (Bom) and the Honble Karnataka High Court in the case of CCE, Bangalore Vs. MTR Foods Ltd.,- 2012 (282) ELT 196 (Kar) has appreciated that if the returns were filed promptly and audit has also taken place; as there were no lack of bonafides; their Lordships took a view that in such a situation extended period cannot be invoked. In our considered view, in all these appeals all the appellants acted under bonafide belief that they are eligible for Cenvat credit of duty paid on towers and pre-fabricated buildings and filed returns indicating availment and utilisation of credit, allegation of suppression of material facts with intent to evade tax cannot be sustained.
32. We find considerable force in the arguments raised by the learned Counsel on limitation; accordingly, we hold that the impugned orders that confirms the demands invoking extended period of Cenvat Credit availed and utilised by all appellants herein, are unsustainable and are liable to set aside and we do so.
33. As regards the demands which are within the limitation period; on merits the issue is covered against the appellants, demands in respect of show-cause notices which are within the limitation period are liable to be upheld and the impugned order to the extent are sustainable. The demands within the limitation period as confirmed are upheld along with interest.
34. In our considered view, as the issue was of are interpretative nature i.e., as to eligibility of Cenvat credit or otherwise on the towers and the building and had to be settled in the hands of the Honble High Court, the appellants could have entertained a bonafide belief. Hence, all the penalties imposed on all the appellants herein are set aside by invoking the provisions of Section 80 of the Finance Act, 1994.
35. To sum up, we dispose of all the appeals by holding as under:
i) The confirmation of demand of ineligible Cenvat credit and interest thereof on towers and pre-fabricated buildings within the limitation period are upheld in respect of all the appellants.
ii) Demand of ineligible Cenvat credit which is confirmed along with interest, by invoking extended period is set aside in respect of all the appellants.
iii) All the penalties are set aside.
36. Appeals are disposed of as indicated herein above.
(Pronounced in Court on ) (P.R. Chandrasekharan) Member (Technical) (M.V. Ravindran) Member (Judicial) pj 1 36