ST - Bharti Airtel's case does not need relook - subsequent Bench cannot come to opinion that particular provision was misinterpreted and under that pretext seek to reinterpret it again - CENVAT credit on Tower Parts & Pre-fabricated buildings is not admissible: High Court
By TIOL News Service
MUMBAI, SEPT 10, 2015: THE appellant is Vodafone India Ltd. and they are before the Bombay High Court challenging the order of the CESTAT wherein the Tribunal confirmed the order of the Commissioner (TAR), Mumbai, who held that the Appellant was not entitled to claim CENVAT credit of duty paid on towers (in CKD/SKD form), parts of towers, shelters / prefabricated buildings purchased by them and used for providing output service.
Adverting to the decision in the case of Bharti Airtel Ltd. - 2014-TIOL-1452-HC-MUM-ST, it is inter alia submitted that though the Division Bench of the Bombay High Court has taken the view that the telecom service provider is not entitled to take CENVAT credit of the duty paid on the said goods on the ground that it is immovable property and hence, do not qualify as 'capital goods' or 'inputs', the same required a relook.
On the other hand, the counsel for the Revenue submitted that the issues raised and the questions of law as projected in the Appeals, are squarely covered by the judgment in Bharti Airtel's case and, therefore, the present Appeals raise no substantial questions of law that need to be considered. Inasmuch as the Appeals were meritless and ought to be dismissed, he submitted.
The High Court perused the papers and proceedings in the Appeals and noted that the identical issue as the one canvassed before it was raised before the Court in the Bharti Airtel's case.
After extracting the substantial questions of law that were framed in the Bharti Airtel's case and paragraphs 23, 31, 32 and 33 of the said order, the High Court observed that the said decision squarely applied to the case of the appellant.
It was further observed -
+ We find that this Court has considered all aspects of the matter and then come to the conclusions that it did. Mr Salve, despite all the finesse at his command, was unable to persuade us to hold that the decision in Bharti Airtel's case requires a relook. The very provisions that were relied upon by Mr Salve, were considered and interpreted by the Division Bench in Bharti Airtel's case. Not only are those findings binding on us but we are in full agreement with the same.
+ Once the very rules that have been relied upon by Mr Salve, are interpreted by the Division Bench of this Court, judicial discipline demands that this interpretation be followed by us.
+ It is now quite well settled that an interpretation of a statutory provision, and equally a misinterpretation, by one Bench of the High Court would be binding on a coordinate Bench of that very High Court.
+ The subsequent Bench cannot come to the opinion that a particular provision was misinterpreted and under that pretext seek to reinterpret it again. If the subsequent Bench is of the view that the statutory provisions are misconstrued and / or misinterpreted, the only recourse available to it would be to refer it to a larger Bench.
+ In the present case, we see no reason to adopt this course of action. We are in full agreement with the reasoning given in Bharti Airtel's case and therefore, are unable to accept the submissions of Mr Salve that the aforesaid decision requires a relook.
+ If for any reason, the Appellant is of the opinion that the decision in Bharti Airtel's case does not lay down the correct law, then the remedy to correct the same lies before a Superior Court.
Reference was also made by the Bench to the observations of the Supreme Court in the case of State of Gujarat vs. R.A.Mehta [(2013) 3 SCC 1] in the matter of binding effect of a judgment.
The High Court also noted that the decision in Bharti Airtel's case has been challenged before the Supreme Court in Civil Appeal Nos.10409 and 10410 of 2014 and in which notice has been issued.
Holding that the issue raised in the present Appeals are squarely covered by the decision of the Bombay High Court in Bharti Airtel's case and, therefore, raise no substantial questions of law that need to be answered, the High Court concluded that there was no merit in the appeals and accordingly dismissed the same.
(See 2015-TIOL-2098-HC-MUM-CX)
