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2019 (11) TMI 1462 - AT - Service TaxCENVAT Credit - capital goods - curtailment of credit in proportion to the deployment for rendering of exempted services - procurement of ‘cube testing machines’, ‘excavators’, ‘generators’ and ‘EOT cranes’ which, had been deployed in the erstwhile state of Jammu & Kashmir or for rendering services in Gabon and Mauritius - non-discharge of obligation as provider of ‘erection, commissioning and installation service’ - allowance of depreciation. CENVAT Credit - HELD THAT:- There is no finding that the impugned ‘capital goods’ were intended in the exclusive usage for activities that are beyond the scope of taxation under Finance Act, 1994. Furthermore, we are unable to ascertain from the findings whether deployment of the ‘capital goods’ in Gabon and Mauritius was not for performance of activities that would have been taxed but for being export of services. The impugned order has also placed reliance on rule 3(5) of CENVAT Credit Rules, 2004 to justify the recovery of credit; we are unable a find reference to this provision in the show cause notice. It is settled law that the noticee cannot be denied an opportunity to rebut the grounds on which proceedings are initiated against them. These aspects need examination before the claim of the appellant on these counts can be accepted. The adjudicating authority appears to have come to the conclusion of taxability under the designated service on the premise that the claim of excisability, without having discharged that obligation, can lead to no conclusion other than that of taxability under Finance Act, 1994 - It is moot whether the contract value in the dispute before us can be vivisected for isolating the tax liability under Finance Act, 1994 and, therefore, needs further examination. Allowance for Depreciation - HELD THAT:- The appellant has submitted that a revised return has been filed under Income Tax Act, 1961 to exclude the claim for depreciation. The adjudicating authority has not accepted the claim of consequent eligibility in the absence of evidence. Nevertheless, the claim of the appellant on this aspect also requires consideration. Matter remanded back to the respective original authorities to assess the claims of the appellant - appeal allowed by way of remand.
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