Cell phone Towers – No Cenvat credit
The CBEC had written to all Chief Commissioners, DGST, DGCEI and all Service Tax Commissioners that it has been brought to the notice of the Board that telecom operators are availing Cenvat Credit on goods like angles, channels, beams, which are used for building transmission towers. Similarly, Cenvat Credit is also being availed on pre-fabricated building, shelters, PUF panels, etc., used for housing/storage of generating sets and other equipments. It appears that the telecom operators claim these items to be ‘inputs' for providing telecom services.
And Board feels:-
The items mentioned above are used for erecting towers, and making housing/storage units. Thus, these goods are used in making products that cannot be called as excisable goods, being attached to earth, and are not chargeable to excise duty. The items such as angles, channels, beams, etc., are this inputs for civil structures and as such, are not used for providing taxable service. Therefore, it is the considered view of the Board that credit of duty paid on such items is not available to the telecom service providers.
So the Board wants that such irregularly Availed Credit on this Account must be recovered expeditiously, within the current financial year. Compliance/difficulty faced in recovering such irregularly availed credit, if any, may be reported to Board.
Show Cause Notices must have already started flying.
In , the Tribunal observed, “We find that a prima facie case has been made out as regards credit on Towers and parts of Towers and pre-fabricated shelter for protecting Transmission devices in the light of the order dated 31.1.07 of the Commissioner of Central Excise, Mumbai - the Department itself has expressed different views on the availability of Service Tax credit on these items.”
CBEC F.No.137/315/2007-CX.4 Dated February 26, 2008