2017 (6) TMI 625 - AT - Central Excise

CENVAT credit - MS items - denial on the ground that M.S. Angles, Channels & beams used in fabrication of High Back Chair, Tables used in office premises cannot be held input/capital goods and eligible to CENVAT credit - Held that - the credit availed in relation to M.S. Angles, channals, etc. used in the manufacture/fabrication of furniture, namely Table, High Back Chair used in the office premises of the appellant cannot be held admissible to them - credit of ₹ 1,61,410/- availed on these items used in the fabrication of Table, High Back Chair is recoverable with interest and penalty. Since the appellant was not given option to discharge 25% of penalty imposed under Rule 15 of Cenvat Credit Rules, 2004 read with Section 11AC of CEA, 1944, they are eligible to the same subject to fulfillment of conditions laid down under the relevant provisions - appeal allowed - decided partly in favor of appellant.

Summary

Issues:
- Eligibility of CENVAT credit on angles, channels, beams, etc., used in fabrication of capital goods and furniture.
- Eligibility of CENVAT credit on input services like rent-a-cab service, travel agent service, and Mandap Keeper service.

Analysis:
1. Eligibility of CENVAT credit on angles, channels, beams, etc.:
The appellant availed CENVAT credit on items used in the fabrication of capital goods and furniture. The advocate argued that based on a previous Tribunal judgment, these items are eligible for CENVAT credit. However, the Revenue contended that certain items used in the fabrication of furniture should not be considered as eligible for credit. The Tribunal found that while some items like M.S. Angles, channels, beams used for supporting capital goods are eligible for credit based on precedent, those used in the manufacture of furniture are not admissible. Therefore, the credit availed on furniture fabrication items was deemed recoverable with interest and penalty.

2. Eligibility of CENVAT credit on input services:
Regarding the eligibility of CENVAT credit on input services such as rent-a-cab service, travel agent service, and Mandap Keeper service, the Tribunal referred to relevant judgments. It was noted that the Gujarat High Court had previously ruled these services as input services, making them eligible for CENVAT credit. The Tribunal also cited judgments related to Mandap Keeper service and Gardening service, confirming their eligibility for credit. Consequently, the Tribunal allowed the CENVAT credit on these input services, modifying the impugned order to reflect this decision and partially allowing the appeals.

In conclusion, the Tribunal's judgment clarified the eligibility of CENVAT credit on specific items used in fabrication and input services, aligning with previous legal interpretations. The decision provided a detailed analysis of each issue raised, relying on established legal precedents to determine the admissibility of the credit claimed by the appellant.