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2021 (8) TMI 811 - AT - Service TaxCENVAT Credit - input service/capital goods - import of passenger lift - construction of a complex, building, civil structure etc. - declared service or not - Rule 2A of Service Tax Determination of Value Rules, 2006 - demand of interest and penalty - HELD THAT:- When the passenger lift was imported, it was classified under Chapter 84 and the Classification was accepted by the Department and once the classification is accepted by the Department, it cannot be changed at the receiver’s end by the Department in view of various decisions relied upon by the appellant. Further, as per the impugned order, two conditions have to be fulfilled for capital goods to claim CENVAT credit as mentioned in Rule 2(a) (A) of CCR, 2004 for eligibility of credit (a) They should fall under the category mentioned in Rule 2(a)(A), (b) They should be used as mentioned in Rule 2(a)(A) whereas as per the Commissioner, only first condition is satisfied and as per the learned Commissioner, the entire works contract is not service, only service portion in works contract is service which is evident by section 66E(h) of the Finance Act, 1994. The lift is essential for providing the output service and therefore, the appellant has fulfilled both the conditions to avail the credit, hence the denial of credit is not sustainable, simply because the lifts are fitted into the building does not have an impact on treatment of lifts as capital goods because even after fitting into the building, lift is a lift and covered under Chapter 84 and cannot be considered as input just to deny the benefit of CENVAT credit. As per the Construction Agreements also, lift is one of the common facility provided in the project and lift is a capital goods being used for providing taxable services on which service tax is being paid by the appellant, therefore denying benefit of credit on capital goods is not proper - the basis to deny the credit is not legally sustainable. The appellant is entitled to CENVAT credit on lift which is capital goods and the denial of the same is not sustainable - Appeal allowed - decided in favor of appellant.
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