On 31.03.2021, the Hon’ble CESTAT, New Delhi has pronounced its judgment in the matter of Mahanagar Telephone Nigam Ltd. v. CCE & ST, ST Appeal No. 52342 of 2015 thereby setting aside the impugned order passed by the Commissioner, Service Tax.
The key issues were as under:
First issue: Whether the Appellant as a franchisor had provided any service to the franchisee in relation to a franchise when it granted ‘land development rights’ to the PDC/ JV Company.
Second issue pertained to denial of Cenvat Credit on purchase of telecommunication towers during the period 2004-05 to 2006-07.
The Hon’ble Tribunal has ruled in favour of the Appellant on both these issues.
The Appellant was represented by Adv. Puneet Agrawal and Adv. Gaurav Gupta. The Respondent Department was represented by Dr. Radhe Tallo, Authorized Representative.
1. On franchise service
a. No representational right was granted by MTNL to Project Development Company
b. Development of immovable property by Joint Venture company is in no manner identified with that of Appellant
c. MTNL had granted bundle of rights to PDC including right to develop the knowledge park.
2. Telecom Towers
a. Issue of credit on purchase of telecommunication towers is covered by decision of Delhi High Court in Vodafone Mobile services
b. Appellant had furnished details of capital goods to the Commissioner. From the said details, it is evident that capital goods fall under chapter 84 and 85. The Commissioner did not consider the same and assumed that all capital goods fell under Chapter 73. Hence, cenvat credit has rightly been availed.
Copy of judgment is provided below.
Gaurav is an advocate by profession and has done his B.Com(H) from Hansraj College and LL.B(H) from Faculty of Law, Banaras Hindu University. He has represented clients from Diverse sectors, providing services in Litigation involving Indirect Taxes, IBC, Commercial laws, Direct Taxes, RBI matters. He is active beforewrit Courts, Tribunals and Quasi-Judicial Authorities.