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2017 (4) TMI 1021 - AT - Central ExciseCENVAT credit - MS items - appellant claims that these items are used in fabrication of capital goods - Department has denied the credit on such items observing that after fabrication the capital goods when attached to the earth become immovable property - Held that - In the case of M/s Sanghvi Forging & Engineering Ltd. 2013 (11) TMI 743 - CESTAT AHMEDABAD , the Tribunal has held that although the credit is availed under the category of capital goods, the same cannot be denied under the category of inputs if the same is eligible - disallowance of credit on MS items is unjustified. CENVAT credit - various input services - rent-a-cab service - manpower service - House Keeping service - gardening services - accommodation services - erection & commissioning services - insurance services - PF reimbursement services - services received for construction of compound wall - Held that - The services of Rent-A-Cab is availed by the appellant prior to 01.04.2011, except for an amount of ₹ 498/-. Therefore, the credit on the said services except for an amount of ₹ 498/- is allowed - The services for manpower is received for the purpose of railway track maintenance which was held to be admissible - House Keeping services were used for keeping the premises clean. Similarly, gardening services, accommodation services, erection & commissioning services, insurance services and PF reimbursement services were held to be eligible. Out of the total amount of ₹ 6,04,875/- in regard to services received for construction of compound wall, it is submitted by the appellant that ₹ 84,587/- pertains to the credit availed after 01.04.2011. In the case of M/s Nirma Ltd. Vs. CCE & ST, Vadodara-I 2013 (7) TMI 46 - CESTAT AHMEDABAD , the Tribunal discussed the eligibility for the period prior to 01.04.2011 and has held that credit on services relating to construction of compound wall is eligible - except for the amount of ₹ 84,587/- the credit in respect of the services relating to construction of compound wall is eligible for credit. Appeal allowed - decided partly in favor of appellant.
Issues Involved:
1. Eligibility of CENVAT credit on MS items (Angles, Channels, Plates, Sheets) used for fabrication of capital goods. 2. Eligibility of CENVAT credit on service tax paid on various input services. Issue-wise Detailed Analysis: 1. Eligibility of CENVAT Credit on MS Items: The appellants, engaged in the manufacture of cement, availed CENVAT credit on MS items used for fabricating various capital goods such as Bulk Loading Bin, Screw Conveyor, Trailer/Truck Loading Machine, Cable Galleries, Unloading Machine, and Silos. The original authority denied the credit, asserting that these items, once fabricated and attached to the earth, became immovable property and thus ineligible for credit under the definition of capital goods. The appellant argued that the MS items were used for fabricating capital goods and should be eligible for credit under the category of inputs. They cited several judgments, including *India Cements Limited Vs. CESTAT, Chennai* and *Ultratech Cement Limited Vs. CCE, Hyderabad-IV*, to support their claim that credit should be allowed even if availed under the wrong category, provided it is otherwise eligible. The Tribunal held that the fabricated goods, though immovable, should be considered as capital goods. It referenced the judgment in *Sanghvi Forging & Engineering Ltd. Vs CCE, Vadodara-I*, which allowed credit on inputs used for fabricating capital goods. Consequently, the Tribunal found the disallowance of credit on MS items unjustified and set aside the impugned order, allowing credit of ?37,14,674/-. 2. Eligibility of CENVAT Credit on Service Tax Paid on Input Services: The appellant also contested the denial of CENVAT credit on service tax paid for various input services such as Rent-a-Cab, Railway & Manpower for Railway Track maintenance, Housekeeping, Construction of compound wall, Horticulture, Accommodation services, Erection & Commissioning services, Insurance services, and PF reimbursement services. The Tribunal examined each service individually: - Rent-a-Cab Services: Credit availed prior to 01.04.2011 was allowed except for ?498/- availed post-01.04.2011. - Railway & Manpower for Railway Track Maintenance: Credit was allowed, referencing the Tribunal's decision in the appellant's own case. - Housekeeping, Gardening, Accommodation, Erection & Commissioning, Insurance, and PF Reimbursement Services: Credit was allowed based on various precedents. - Construction of Compound Wall: Credit was allowed for the period prior to 01.04.2011, except for ?84,587/- availed post-01.04.2011, referencing *M/s Nirma Ltd. Vs. CCE & ST, Vadodara-I*. The Tribunal concluded that the appellant was eligible for credit on input services amounting to ?9,13,541/-, allowing the appeal partly with consequential reliefs. Conclusion: The Tribunal allowed the appeal in part, granting eligibility for CENVAT credit on MS items and most input services, setting aside the lower authorities' orders to the extent of ?37,14,674/- on MS items and ?9,13,541/- on input services. The decision provided significant relief to the appellant, affirming the broader interpretation of eligibility for CENVAT credit on inputs and services used in the manufacturing process.
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