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2015 (12) TMI 489 - CESTAT MUMBAI

2015 (12) TMI 489 - CESTAT MUMBAI - 2016 (42) S.T.R. 450 (Tri. - Mumbai) - CENVAT Credit on capital goods received much before registration - whether the respondent was correct in availing the cenvat credit of the capital goods which was procured by them during the year 2005-06 and installed in their hotel which started functioning from 21 May, 2009 - Held that:- Respondent has registered themselves with the authority as recipient for services and also provider of services. The capital goods whi .....

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g the findings by any evidence which can be considered for coming with conclusion other than what first appellate authority has arrived at that the cenvat credit on the capital goods is allowable, which were received even when the respondent was not registered as service provider. It is common knowledge that the capital goods are received for installation during the construction activity and the service tax liability arises when the hotel starts functioning. - Decided against Revenue. - Appeal N .....

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n support of the findings of first appellate authority and accordingly, it is disposed of. 3. Heard both sides and perused the records. 4. The issue that falls for consideration is whether the respondent was correct in availing the cenvat credit of the capital goods which was procured by them during the year 2005-06 and installed in their hotel which started functioning from 21 May, 2009. It is undisputed that the respondent has registered themselves with the authority as recipient for services .....

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ld in favour of the respondent. "8.3 The case before me is simpler. It is not the case of the Department that the appellant was not registered at all. The main ground is that the appellant as registered as service recipient' and got the registration modified as service "provider' subsequent to availing credit. There is no allegation that credit was availed without paying the duty on those capital goods. Going into, the circumstances, the "stand of the appellant is convinci .....

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the registration certificate by adding new services when they started their activities of hotel operation from 21 st May, 2009. That means that in their case, they were registered when capital goods were received, albeit, as service receiver. If the Hon'ble Tribunal has held admissibility of credit for those who were not registered at all, there is no reason why credit in the present case be not allowed. In this background and in view of the catena of case laws cited above. I find that the s .....

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The CENVAT credit in respect of capital goods received in a factry or in the premises of the provider of output service at any point of time in a given financial year shall be taken only for an amount not exceeding fifty percent of the duty paid on such capital goods in the same financial year. b) The balance of CENT/AT credit may be taken in any financial year subsequent to the financial year in which the capital goods were received in the factory of the manufacturer, in the premises of the pro .....

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tal goods in a factory or in the premises of the provider of output service at any point of time in a given financially year as reference point linked to the first 50 credit of the duty paid on such capital goods. Then the remaining 50 credit can be taken in subsequent year in terms of clause (b) of Rule 4(2) of CCR, 2004. Evidently, if the credit is not taken in the first or second year at all, then whenever credit is taken, the entire J.OO credit can be taken. In view of this legal position I .....

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