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2012 (7) TMI 381 - AT - Service TaxEligibility of the respondent for availment of cenvat credit of the duty paid on the Air Compressors purchased by them and received in the factory premises on 05.05.2005 - Air Compressors which are purchased and received by the appellant was for providing out put service Commercial and Industrial Construction Services (Pipeline Services) and the said services were brought into the tax net from 16.6.2005 Held that - Cenvat credit could not be availed on duty paid on such Air Compressors though it is capital good as the said capital goods were received in the premises of the service provider i.e. respondent before the services were taxable under the Finance Act, 1994.
Issues involved: Eligibility of the respondent for availment of cenvat credit on Air Compressors purchased before services became taxable.
Analysis: 1. The appeal was filed by the revenue against the order regarding the eligibility of the respondent for cenvat credit on Air Compressors purchased before services became taxable under the Finance Act, 1994. 2. The adjudicating authority held that the cenvat credit could not be availed on the duty paid for the Air Compressors as they were received before the services were taxable. The first appellate authority set aside the original order in favor of the assessee, leading to the revenue's appeal. 3. The undisputed fact was that the assessee received the Air Compressors before the services became taxable, and they were to be used for providing output services that came under taxable services after the date of purchase. 4. The judge considered a judgment of the Hon'ble Gujarat High Court in a different case and found that the facts in that case were different from the current case, thus not supporting the respondent's case. 5. Referring to a judgment by the Larger Bench of the Tribunal in a similar case, the judge emphasized that cenvat credit eligibility is determined based on the dutiability of the final product on the date of receiving capital goods. 6. The judge rejected the attempt to distinguish the earlier judgment based on the installation requirement, as the capital goods in this case were to be used only for services taxable from a specific date. Therefore, the judge upheld the appeal filed by the revenue, setting aside the previous order in favor of the assessee.
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