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2023 (7) TMI 303 - CESTAT KOLKATACENVAT Credit - input or capital goods - Towers and Parts & Accessories of Towers falling under Chapter 73 of the Central Excise Tariff Act, 1985 - credit disallowed on the ground that the Towers were not capital goods as defined under Rule 2(A) of the said Rules and that the parts & accessories used in the erection of towers do not satisfy the definition of input as the towers are civil structures attached to earth and not excisable goods - HELD THAT:- It is observed that a provider of output service is eligible for availing credit on duty of excise paid on capital goods, input and Service Tax paid on input service used in relation to providing of output service. Towers & parts & accessories of Towers are an essential ingredient for providing the said output service. Installed Towers are used for receiving and transmitting signals without which clients of the assessee would not be able to receive or transmit signals in their individual sets. Hence, it satisfies the definition of input as defined under Rule-2(k) of the said Rules - Since the department has accepted the payment of duty on Towers by considering them as excisable goods, the credit availed on the inputs used in manufacturing the excisable goods cannot be denied. Thus the Commissioner has rightly dropped the demand in the impugned order and the dropping of the demand is sustainable. ETR & ETP transferred credit of Rs.6,68,37,663/- to the assessee through inter office memo called ATD/TED during the period 2005-06 and 2006-07 - HELD THAT:- The Appellant has fulfilled the two primary conditions of availing credit, one is that the input/capital goods/ input service is duty paid and the second is that those have been used in rendering of the said output service. Since, the Appellant satisfies the essential conditions for availing the credit, the Cenvat credit cannot be denied on account of procedural lapse, if any. Accordingly, the findings of the adjudicating authority that Cenvat credit availed on the basis of Invoice/bills issued through ATD/TED, by ETR and ETP, the two branches of the Appellant cannot be denied on the ground that they have not been registered as ‘Input Service Distributor’ for transferring the credit, agreed upon. There is no substance in the allegation of the department that the Appellant has not manufactured any dutiable final products during the relevant period - the adjudicating authority has rightly dropped the demand on this count in the impugned order - Appeal of Revenue dismissed.
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