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2017 (7) TMI 679 - CESTAT HYDERABADCENVAT credit - allegation of fraudulent availment - said amount with interest reversed on being pointed out - penalty - Held that: - the allegations in the show-cause notice are general in nature, like, that the appellants had availed the CENVAT credit fraudulently with intention to evade duty and there are no specific allegations as required under the provisions of Section 11AC or Rule 15(2) of the CENVAT Credit Rules, 2004. In the absence of any specific allegations, we hold that the issue seems to be covered by the judgment of the apex court in the case of Rajasthan Spinning and Weaving Mills [2009 (5) TMI 15 - SUPREME COURT OF INDIA], where it was held that the assessees had made payment of the demands simply in order to buy peace and to avoid any litigation. In those circumstances the imposition of penalty was wholly unjust - duty with interest upheld - penalty set aside. CENVAT credit - capital goods - MS channels, beams, TMT bars, CTD bars, etc. - Held that: - structural items such as MS channels, beams, TMT bars, CTD bars, etc. are held to be eligible for availment of CENVAT credit despite being used for fabrication of support structures for various capital goods. In the case in hand, it is on record that the respondent in this case had used these structural items for fabrication of capital goods which are put to use in the factory premises - reliance placed in the case of Singhal Enterprises Pvt. Ltd. Vs. CC&CE, Raipur [2016 (9) TMI 682 - CESTAT NEW DELHI], where it was held that applying the “User Test” to the facts in hand, we have no hesitation in holding that the structural items used in the fabrication of support structures would fall within the ambit of ‘Capital Goods’ as contemplated under Rule 2(a) of the Cenvat Credit Rules, hence will be entitled to the Cenvat Credit - credit allowed. CENVAT credit - input services - denial on the ground that these input services were utilised for construction of a factory which is immovable property and is not liable to Central Excise duty or any output services - Held that: - the said input services were received by the respondent during the period September 2008 to June 2009. During the relevant period, Rule 2(l) of the CENVAT Credit Rules, 2004 (before its amendment on 01/04/2011) specifically allows the CENVAT credit of the service tax paid on the input services which are used for setting up / renovation / modernisation of factory premises by a manufacturer - similar issue decided in the case of Liugong Indian Pvt. Ltd. Vs. CCE&ST, Indore [2014 (3) TMI 984 - CESTAT NEW DELHI], where it was held that service tax credit on these items can be availed - the services, in question, used for setting up of factory have to be treated as input service and would be eligible for Cenvat credit, as the factory has been setup for manufacture of final products which are liable to Central Excise duty. Therefore denial of Cenvat credit, in question, is contrary to the provisions of Rule 2(l) of Cenvat Credit Rules, 2004. Appeal allowed - decided in favor of appellant.
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