2026-VIL-494-CESTAT-CHD-ST
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SERVICE TAX CESTAT Cases

Service Tax - Eligibility of CENVAT Credit on inputs, capital goods and input services for setting up and operating telecom towers and shelters - The assessee, engaged in providing passive infrastructure support and related operation and maintenance services to telecom operators, procured various inputs, capital goods and input services and availed CENVAT Credit. The revenue authorities alleged that the assessee wrongly availed CENVAT Credit on such items and issued show cause notices proposing to deny the credit - Whether the assessee is eligible to avail CENVAT Credit on (i) inputs and capital goods used for setting up and operating telecom towers and shelters, and (ii) input services used for installation, maintenance and operation of telecom towers and shelters - HELD - The issues are no longer res integra and have been settled in favor of the assessee by the Supreme Court, High Courts and various Tribunal benches - Regarding inputs and capital goods, the Supreme Court has held that telecom towers and pre-fabricated shelters, although not devices for transmission or reception of signals, are essential infrastructure for rendering the output service of mobile telecommunications and hence, their use in providing output services qualifies them for CENVAT Credit under the Cenvat Credit Rules. The Tribunal's own earlier decisions and various High Court and Tribunal rulings have also consistently upheld the assessee's eligibility for CENVAT Credit on such items - Regarding input services, the Larger Bench of the Tribunal has held that the expression "input service" has a wide latitude and therefore, input services used for setting up and operation of telecom towers are eligible for credit, provided such services are used in the course of providing taxable output services. This position has also been affirmed by various Tribunal benches - Following the binding judicial precedents, the impugned orders denying the CENVAT Credit are set aside and the appeals filed by the assessee are allowed. The appeals filed by the revenue challenging the dropping of demands were dismissed
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