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2013 (1) TMI 197 - AT - Central ExciseCENVAT Credit wrongly availed - Rule 15 of Cenvat Credit Rules, 2004 – Rule 2(a) of Cenvat Credit Rules - CENVAT Credit availed on capital goods received when the factory was still under construction - Circular No. 88/88/94, dated 26-12-1994 – Held that:- There may be dispute about the eligibility for Cenvat credit in respect of Chapters 72 and 73 items as to whether the same were used in the foundation for erection of capital goods or as supporting structures for machinery and only to this extent the Cenvat credit would be inadmissible. For rest of items covered by the definition of capital goods, as given in Rule 2(a) are concerned, during the period of dispute there was no provision that the Cenvat credit in respect of such items of capital goods cannot be taken prior to commencement of production and eligible for Cenvat credit. CENVAT Credit on inputs used in fabrication of P&M manufactured by contractor – appellant who is not the manufacturer of these items of capital goods – Held that:- Prima facie view denial of Cenvat credit would be correct only to the extent the items had been used purely in erection work, i.e. foundation for erection of machinery and making supporting structures for the machinery, or other structures fixed to earth, but to the extent the steel items have been used in fabrication of identifiable items of machinery, covered by the definition of capital goods as given in Rule 2(a) of Cenvat Credit Rules, the credit would be admissible. CENVAT Credit of service tax of various input services used in the construction and setting up of the factory - Circular No. 345/6/07-TRU., dated 4-1-2008 – Held that:- Prima facie view that work contract service and consulting engineers service are the services relating to setting up of a factory and, hence, would be covered by the definition of input service. Similarly, inward transportation of input or capital goods was also specifically covered by the definition of input service and, hence, the GTA service used for inward transportation of the goods would also be eligible for Cenvat credit. Similarly, the service of security, telephone, rent-a-cab operator service, used in connection with setting up of a factory would also be covered by the expression “activities relating to business” in the definition of input service and would be eligible for Cenvat credit The bulk of the Cenvat credit has been incorrectly disallowed except items of Chapters 72 and 73. Not the case for total waiver.
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