IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL EASTERN ZONAL BENCH : KOLKATA REGIONAL BENCH – COURT NO. 1 Service Tax Appeal No. 75750 of 2018 (Arising out of Order-in-Original No.01/Comm./Audit/S.Tax/BBSR/2017-18 dated

30.11.2017 passed by Commissioner of CGST & CX, Bhubaneswar)

M/s. The Chief General Manager, : Appellant CMTS, BSNL, Odisha Telecom Circle, Bhubaneswar, Dist.-Khurda, IG Park, Ashoknagar, Bhubaneswar-751001.

VERSUS Commissioner of GST & CentralExcise , : Respondent Central Revenue Building, Odisha,Bhubaneswar-751007.

APPEARANCE:

Shri Dipro Sen & Ms. Ekta Jhunjhunwala, Advocates for the Appellant Ms.Suman, Authorized Representative for the Respondent CORAM:

HON’BLE SHRI ASHOK JINDAL, MEMBER (JUDICIAL)

HON’BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL)

FINAL ORDER NO. 75120/ 2026 DATE OF HEARING :15.01.2026 DATE OF HEARING: 15.01.2026 Order : [Per Shri Ashok Jindal]

The Appellant is engaged in providing cellular telephone services. In this regard, the Appellant availed Cenvat Credit on tower materials procured for setting up and installation of towers. Such towers are required for installing antennas and various other equipment to provide cellular telephone services. Further,”AAA” conductors are used for powering the tower equipment which is essential for rendering telecommunication services. Moreover, PSC Pole is also an essential part of the cell site.

2. An audit of the records of the Appellant was conducted for the period 2010-11 to 2012-13, basis which it was noticed that the Appellant has availed credit inter alia on items, viz. Tower material, PSC Poles and AAA conductors (collectively referred to as „subject goods‟) as capital goods, which is irregular and not in accordance with the provisions of the Cenvat Credit Rules, 2004 (hereinafter referred to as the „Credit Rules‟). Accordingly, details of availment of credit on such items was sought for FY 2013-14 and FY 2014-15.

3. The said audit proceedings culminated into issuance of SCN dated 06.10.2015 wherein Cenvat Credit to the tune of Rs. 2,87,41,452/- availed on various goods used for setting up telecommunication towers and cell sites was proposed to be denied.

4. The Appellant filed detailed replies wherein it was explained that the Appellant has rightly availed Cenvat Credit on the items under dispute. It was further submitted that the demand for recovery of credit to the tune of Rs. 1,10,54,404/- reflected as opening balance in the books pertains to the period prior to the year 2009 and is therefore, time-barred being prior to the five years limitation period.

5. The Ld. Commissioner vide the impugned dated 30.11.2017, confirmed the demand of Cenvat Credit to the tune of Rs. 1,76,87,048/- while setting aside a demand of Rs. 1,10,54,404/- which pertained to credit availed beyond 5 years from the date of issuance of SCN. The observations basis which the demand for recovery of CENVAT credit has been confirmed are summarized below, for ease of reference:

a. Tower and parts thereof are fastened and fixed to earth and become immovable after their erection. Therefore, cannot be considered as goods, let alone capital goods.

b. In CKD or SKD condition, the tower and parts thereof are classified under Chapter Heading 7308 which is neither specified as capital goods under Rule 2(a)(A) or (ii) of the Credit Rules nor are they components, spares or accessories of the goods specified under the said sub-clauses.

c. Towers are nothing but support structures to the antennas and therefore as per the exclusion clause under Explanation 2 to Rule 2(k) of the Credit Rules, the tower materials cannot be termed as inputs.

d. As per the decision of the Hon‟ble Bombay High Court in the case of Bharti Airtel Ltd. v. CCE, Pune- III 2014 (35) STR 865 (Bom)., towers and parts thereof are neither capital goods nor inputs. Towers are immovable structures and ipso facto non-

marketable and non-excisable.

e. Further, the credit on PSC poles and AAA conductors was held to be inadmissible and not