2025 (7) TMI 1207 - AT - Service Tax

CENVAT Credit - capital goods or not - Pre-Assembly Platforms - extended period of limitation - penalty - HELD THAT - The goods procured by the appellant clearly fall within the ambit of jigs and fixtures under the definition of capital goods . Accordingly it is found that the goods on which the appellant had availed CENVAT Credit are categorically covered within the definition of capital goods and hence the appellant has rightly availed CENVAT Credit on such capital goods . There are no infirmity in the availment of credit by the appellant on the said items and consequently the impugned order denying the CENVAT Credit is set aside. As the appellant is eligible to avail CENVAT Credit the question of demanding interest or imposing penalty does not arise. The impugned order is set aside - appeal allowed.

Summary

ISSUES:

Whether the denial of CENVAT Credit on "Pre-Assembly Platforms" and related items classified under Chapter Heading No. 73084000 is justified.Whether the items on which CENVAT Credit was availed qualify as "capital goods" under Rule 2(a) of the CENVAT Credit Rules, 2004.Whether the extended period of limitation for issuing the Show Cause Notice is applicable in the absence of suppression of facts or intent to avail irregular credit.Whether interest and penalty can be imposed when CENVAT Credit is rightly availed on eligible capital goods.

RULINGS / HOLDINGS:

The goods procured, including Panel Assembly Platform, Coil Assembly Platform, Coil Lifting Fixture, Column Pre-Assembly Platform, Boiler Drum Lifting Gantry, Coil Welding Jhula, and lifting hooks, fall within the definition of "jigs and fixtures" under the definition of "capital goods" as per Rule 2(a) of the CENVAT Credit Rules, 2004.The appellant was entitled to avail CENVAT Credit on such capital goods used in providing taxable output services; hence, denial of credit was not justified.The invocation of the extended period of limitation is not sustainable as there was no suppression of facts or intent to avail irregular credit demonstrated by the appellant.Since the appellant was eligible to avail CENVAT Credit, the demand of interest and imposition of penalty do not arise and are accordingly set aside.

RATIONALE:

The Court applied the definition of "capital goods" under Rule 2(a) of the CENVAT Credit Rules, 2004, which explicitly includes "jigs and fixtures" as capital goods eligible for credit.The Court relied on the classification of the goods under the Central Excise Tariff and the statutory framework governing CENVAT Credit to determine eligibility.The extended period of limitation under the relevant provisions requires proof of suppression of facts with intent; absence of such suppression negates the applicability of extended limitation.The Court's decision aligns with the principle that credit on capital goods used in taxable services is allowable, and penalties or interest cannot be imposed where credit is rightly availed.