Commissioner Of Central Goods And Service Tax vs. Bharti Hexacom Limited

EXCIA/4/2019HC RajasthanGSTCNR RJHC02000701201906 March 2025Bench: AVNEESH JHINGAN,MANEESH SHARMA2 pages

AI SummaryDismissed

Facts

The respondent-company, Bharti Hexacom Limited, engaged in telecommunication services during September 1, 2004, to March 1, 2006, availed CENVAT credit for excise duty paid on mobile towers and tower material, treating them as inputs. The adjudicating officer issued a demand order on March 12, 2015, invoking the extended period of limitation. The respondent-company appealed to the Central Excise Service Tax Appellate Tribunal (CESTAT), where they succeeded. The Commissioner of Central Goods and Service Tax, Jaipur, then filed the present appeal before the High Court against the CESTAT's order.

Held

The Court noted that there were conflicting views from the Bombay High Court and the Delhi High Court on the issue. However, the Supreme Court, in its decision in Bharti Airtel Limited vs. Commissioner of Central Excise (2024) 132 GSTR 404, has settled the controversy. The Supreme Court held that towers erected by telecommunication companies and pre-fabricated buildings are not immovable properties, fall under the definition of capital goods, and qualify for input credit. Since the substantive issue regarding the merits of the credit availability has been decided in favor of the respondent and against the department, the question of invoking the extended period of limitation has become infructuous. Therefore, the appeal filed by the appellant is dismissed as infructuous.

Key Issues

1. Whether the CESTAT was legally correct in setting aside the demand for the extended period by holding that the admissibility of CENVAT credit was a disputed issue with conflicting High Court decisions, despite no dispute regarding the inadmissibility of credit on mobile towers and tower materials during the impugned period? 2. Whether the CESTAT was correct in setting aside the demand for the extended period, disregarding the fact that the details of CENVAT credit availed were not disclosed by the assessee to the department? Petitioner's arguments (Revenue): The petitioner contended that the CESTAT erred by considering the existence of divergent High Court views as a reason to disallow invocation of the extended period, arguing that during the period in question, there was no dispute regarding the inadmissibility of credit on mobile towers and tower materials. They also argued that the assessee failed to disclose details of CENVAT credit availed, justifying the extended period. Respondent's arguments (Assessee): The respondent relied on the CESTAT's finding that there were divergent views, which prevented a finding of concealment. They also implicitly supported the CESTAT's decision to set aside the demand for the extended period.

Sections Cited

Not specified

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

[2025:RJ-JP:10152-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Central/excise Appeal No. 4/2019 Commissioner Of Central Goods And Service Tax, Jaipur Earlier Known As Commissioner Of Central Excise And Service Tax Commissionerate Jaipur Ncr Building Statue Circle C-Scheme Jaipur In The State Of Rajasthan ----Appellant Versus Bharti Hexacom Limited, K-21 Sunny House Malviya Marg C- Scheme Jaipur In The State Of Rajasthan ----Respondent For Appellant(s) : Mr. Ajay Shukla For Respondent(s) : Mr. Sanjay Jhanwar, Sr. Adv. through VC with Mr. Rahul Lakhwani & Mr. Wilson Joy HON'BLE MR. JUSTICE AVNEESH JHINGAN HON'BLE MR. JUSTICE MANEESH SHARMA

Order 06/03/2025 AVNEESH JHINGAN, J:-

This appeal is filed against order dated 12.06.2018 passed by Central Excise Service Tax Appellate Tribunal (for short ‘the tribunal’).

The brief facts are that the respondent-company is engaged in providing telecommunication services for the period 01.09.2004 to 01.03.2006. The dispute arose with regard to CENVAT credit availed by the respondent company of the excise duty paid on mobile towers and tower material treating it to be input. The adjudicating officer invoking the extended period of limitation created a demand vide order dated 12.03.2015. The assessee respondent succeeded before the tribunal and hence the present appeal.

[2025:RJ-JP:10152-DB] (2 of 2) [EXCIA-4/2019]

The tribunal held that there were divergent views of the High Courts, hence, it cannot be held to be concealment for invoking the extended period of limitation.

The appeal was admitted on 22.01.2019 on following substantial questions of law:- “(i) Whether the Ld. CESTAT was right in law in setting aside the demand for the extended period holding that the issue of admissibility of Cenvat Credit was in dispute for a considerable period of time and there were conflicting decisions on the issue whereas during the impugned period there was no dispute regarding inadmissibility of Credit on mobile tower and tower materials? (ii) Whether the ld. CESTAT is correct in setting aside the demand for the extended period ignoring the fact that the details of Cenvat Credit availed were never disclosed by the assessee to the department.” 5. by telecommunication company and pre-fabricated buildings were not immovable properties, are covered under the definition of capital goods and qualified for input. Since the controversy on merits has been decided in favour of respondent and against the department the question of invoking extended period of limitation has been infructuous.

The appeal is dismissed as infructuous. (MANEESH SHARMA),J (AVNEESH JHINGAN),J Chandan/29

Reproduced from the public record of the Rajasthan High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.