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2017 (3) TMI 1084 - AT - Central ExciseCENVAT credit - goods used for fabrication of plant and machinery - denial on the ground that the manufacturer of the capital goods were actually the contractors and not the appellant - Held that: - The usage of various iron and steel items in the fabrication of capital goods are to be examined keeping in view the decision of the Hon’ble Supreme Court in Rajasthan Spinning & Weaving Mills Ltd. [2010 (7) TMI 12 - SUPREME COURT OF INDIA] - As there is no discussion regarding the actual use of the iron and steel items and the allegation in the notice is entirely on different ground, we find that denial of credit of ₹ 5,91,15,893/- as ordered by the Original Authority is not legally sustainable. CENVAT credit - capital goods - denial on the ground that no credit is available prior to the commencement of production - Held that: - The capital goods as they were received by the appellant were duty paid and the credit on the same cannot be denied on the ground that they were embedded to earth after installation. The excisability of capital goods is not a point for decision. There is no irregular utilization of credit by the appellant and no such allegation has been made in the show cause notice. Even if the appellant has entered the credit in their books of accounts no utilization is possible without commencement of production. In effect, the credits available on the capital goods will come to be entered as availed and utilized only on production of dutiable final product. We find no justification to deny Cenvat credit on capital goods which, are otherwise legitimately available to the appellant - credit allowed. CENVAT credit - input services - works contract service, GTA, telephone, security service, consulting engineering service, rent a cab operator service etc - denial on the ground that credit on input services can be allowed only if used for provision of a service liable to service tax or manufacture of goods liable to excise duty - Held that: - The credits availed by the appellant are with reference to construction of factory. The said activity is covered by the definition of input service during the relevant time. It is also to be noted that the definition of “input service” is very broad and includes those services which are used by the manufacturer whether directly or indirectly, in or in relation to the manufacture of final products. It is clear that the said service even if used indirectly by the manufacturer in relation to manufacture of final product, the same should be eligible for credit - credit allowed. Appeal allowed - decided in favor of appellant.
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