Date: |
11-11-2014
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Notification No: |
Central Excise INSTRUCTION
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Issuing Authority: |
Central Excise
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Type: |
Instruction
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File No: |
F. No. 267/60/2014-CX.8 |
Subject: |
Judgement of Hon’ble Bombay High Court in the case of M/s Bharti Airtel Ltd. vs The Commissioner of Central Excise, Pune III in Central Excise Appeal No. 73 of 2012 and 119 of 2012 (reported as 2014-TIOL-1452-HC-MUM-ST) – reg.
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Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
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INSTRUCTION
New Delhi, the 11th November, 2014
To
1. All Principal Chief Commissioners,
2. All Chief Commissioners and Directors General,
3. CDR, Customs, Excise and Service Tax Appellate Tribunal,
4. All Principal Commissioners/ Commissioners of Customs/Central Excise/Service
Tax/ All Commissioners (AR)/ Commissioners, Directorate of Legal Affairs.
5. All Commissioners of Central Excise (Appeals)/Commissioners of Customs
(Appeals).
6. [email protected]
Madam/ Sir,
Subject: Judgement of Hon’ble Bombay High Court in the case of M/s
Bharti Airtel Ltd. vs The Commissioner of Central Excise, Pune III in Central
Excise Appeal No. 73 of 2012 and 119 of 2012 (reported as
2014-TIOL-1452-HC-MUM-ST) – reg.
Attention is invited to the judgement of Hon’ble Bombay High Court in the case
of M/s Bharti Airtel Ltd. vs The Commissioner of Central Excise, Pune III in
Central Excise Appeal No. 73 of 2012 and 119 of 2012 (reported as
2014-TIOL-1452-HC-MUM-ST), wherein regarding the issue whether Cellular Mobile
Service Provider is entitled to avail CENVAT credit on Tower Parts &
Pre-fabricated buildings, the Hon’ble Bombay High Court has held in favour of
revenue. While relying on the decision of the Hon’ble Supreme Court in the case
of Saraswati Sugar Mills vs CCE Delhi, (2011(270)ELT 465) = 2011-TIOL-73-SC-CX,
the Hon’ble Bombay High Court has, inter-alia, observed as under:
“It would be misconceived and absurd to accept that tower is a part of antenna.
An accessory or a part of any goods would necessarily mean such accessory or
part which would be utilized to make the goods a finished product or such
articles which would go into the composition of another article. The towers are
structures fastened to the earth on which the antennas are installed and hence
cannot be considered to be an accessory or part of the antenna. The position in
this regard stands fortified from the decision of the Supreme Court in the case
of "Saraswati Sugar Mills vs CCE Delhi, (2011 (270) ELT 465) =
2011-TIOL-73-SC-CX". From the definition of the term ‘input’ as defined in 2 (k)
of the Credit rules it is clear that the Appellant is a service provider and not
a manufacturer of capital goods. A close scrutiny of the definition of the term
capital goods and input indicates that only those goods as used by a
manufacturer would qualify for credit of the duty paid. As observed hereinabove
a service provider like the appellant can avail of the credit of the duty paid
only if the goods fall within the ambit of the definition of capital goods as
defined under Rule 2(a)(A) of the Credit Rules. The contention of the appellant
that they are entitled for the credit of the duty paid towers and PFB and
printers is defeated by the very wording of the definition of input. In any case
towers and PFB are in the nature of immovable goods and are non-marketable and
non-excisable. If this be the position then towers and parts thereof cannot be
classified as inputs so as to fall within the definition of Rule 2(k) of the
credit rules. We clarify that we are not deciding any wider question but
restricting our conclusion to the facts and circumstances which have fell for
our consideration in these appeals.
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.”
2. The above decision of the Hon’ble Bombay High Court is brought to notice of
all concerned for compliance.
Yours faithfully,
(Vikas Kumar)
Director (CX-8)
F. No. 267/60/2014-CX.8
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