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2019 (1) TMI 1105 - AT - Service TaxCENVAT Credit - capital goods or not - Furniture - Cenvat benefit was denied by the department on the ground that furniture classifiable under Chapter 94 of the Central Excise Tariff Act, 1985 has not been specified as capital goods - Held that - In this case, the furniture purchased by the appellant for its business purpose, though is not confirming to the definition of capital goods, but the same should be considered as input, in absence of any restrictions provided in the statute - credit allowed - appeal allowed - decided in favor of appellant.
Issues:
Whether Central Excise duty paid on furniture can be considered as capital goods/inputs for availing Cenvat benefit. Analysis: The Tribunal deliberated on the issue of whether Central Excise duty paid on furniture could be categorized as capital goods/inputs for the purpose of availing Cenvat benefit. The appellant had claimed CENVAT Credit on furniture, considering it as capital goods, which was disputed by the department. The department contended that furniture, classified under Chapter 94 of the Central Excise Tariff Act, 1985, did not fall under the definition of capital goods as per Rule 2(a) of the Cenvat Credit Rules, 2004. The Cenvat statute allows a manufacturer to claim Cenvat Credit on Central Excise duty paid on inputs or capital goods, aiming for the credit to be utilized for paying duty on the final products. The Tribunal noted that there was no explicit restriction in the Cenvat statute stating that credit on capital goods could only be used for duty payment, as credit on inputs could also serve this purpose. Despite the furniture not strictly meeting the capital goods definition, the Tribunal opined that it should be considered as an input unless the statute explicitly prohibits it. Citing a precedent involving ICICI Lombard General Insurance Co. Ltd., where Cenvat benefit was allowed on furniture items necessary for providing taxable services, the Tribunal upheld the appellant's claim. Consequently, the Tribunal found no merit in the department's decision and overturned the impugned order. The appeal was allowed in favor of the appellant, setting aside the earlier ruling.
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