M/S Idea Cellular LTD vs. Commissioner Of Customs, Central Excise And Service Tax

Facts

These two appeals, CEA No. 38 of 2019 and CEA No. 153 of 2017, were filed before the Telangana High Court. CEA No. 38 of 2019 was filed by the Commissioner of GST, Gurugram, against M/s Bharti Airtel Ltd. CEA No. 153 of 2017 was filed by M/s Idea Cellular Ltd. against the Commissioner of Customs, Central Excise and Service Tax, Hyderabad-II Commissionerate. Both appeals involved telecom service providers challenging orders related to Cenvat credit. The appeals stemmed from orders passed by the Customs, Central Excise and Service Tax Appellate Tribunal, which in turn were against orders passed by the Commissioner of Customs, Central Excise and Service Tax.

Held

The High Court held that the question of law involved in both appeals is squarely covered by the judgment of the Hon'ble Supreme Court in the case of M/s Bharti Airtel Ltd. vs. The Commissioner of Central Excise, Pune, and batch of civil appeals, decided on 20.11.2024. The Supreme Court had held that mobile towers and pre-fabricated buildings are 'goods' and not immovable property. Since these goods were used for providing mobile telecommunication services, they qualify as 'inputs' under Rule 2(k) of the Cenvat Credit Rules for credit benefits. Consequently, the appeal filed by the Revenue (CEA No. 38 of 2019) was rejected, with the question of law answered in favour of the assessee. The appeal filed by the assessee (CEA No. 153 of 2017) was allowed in terms of the Supreme Court's judgment. No costs were awarded.

Key Issues

1. Whether Cenvat Credit on pre-fabricated buildings/shelters/PUF panels falling under chapter heading 9406, used for housing/storage of generating sets and other components/equipment/spares, is admissible under the Cenvat Credit Rules, 2001 (Question of law). 2. Whether Cenvat Credit is admissible for channels and beams used for the erection of towers on which transmission equipment was installed (Question of law). The petitioner/appellant argued that Cenvat credit should be admissible for these items as they are essential for providing telecommunication services. The revenue/State contended that these items might not qualify as inputs or that the credit is not admissible under the relevant rules. The judgment notes that an identical issue was decided by the Supreme Court.