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TMI Blog2017 (9) TMI 268X X X X Extracts X X X X X X X X Extracts X X X X ..... otice. Even if the appellant has entered the credit in their books of accounts no utilization is possible without commencement of production. In effect, the credits available on the capital goods will come to be entered as availed and utilized only on production of dutiable final product. We find no justification to deny Cenvat credit on capital goods which, are otherwise legitimately available to the appellant - credit allowed. CENVAT credit - input services - construction of factory - denial on the ground that construction is with reference to immovable property and accordingly the credit is not available - Held that: - The credits availed by the appellant are with reference to construction of factory. The said activity is covered by the definition of input service during the relevant time. It is also to be noted that the definition of “input service” is very broad and includes those services which are used by the manufacturer whether directly or indirectly, in or in relation to the manufacture of final products. It is clear that the said service even if used indirectly by the manufacturer in relation to manufacture of final product, the same should be eligible for credit. Apa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Rajasthan Spinning Weaving Mills Ltd., 2010 (255) E.L.T. 481 (S.C.), wherein the Hon ble Supreme Court has considered an identical issue of steel plates and MS channels used in the fabrication of chimney for diesel generating set. The credit stands allowed in the light of Rule 57Q of the erstwhile Central Excise Rules, 1944. In the said judgment, the Apex Court has referred to the user test evolved by the Apex Court in the case of CCE, Coimbatore v. Jawahar Mills Ltd., 2001 (132) E.L.T. 3 (S.C.), which is required to be satisfied to find out whether or not particular goods could be said to be capital goods. When we apply the user test to the case in hand, we find that the structural steel items have been used for the fabrication of support structures for capital goods. The appellants have argued that the various capital goods, such as, kiln, material handling conveyor system, furnace, etc. cannot be suspended in mid-air. They will need to be suitably supported to facilitate smooth functioning of such machines. It is obvious that the structural items have been suitably worked upon for this purpose. Accordingly, the goods fabricated, using such structurals, will have t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it by applying user test‟ as evolved by the Hon ble Supreme Court in Rajasthan Spinning and Weaving Mills Ltd. (supra). A reference can be made to latest decision of the Tribunal in Singhal Enterprises Pvt. Ltd. Vs. CC CE, Raipur vide final order No.53013/2016 dated 12/08/2016 . 6. Issue No. 2 : The Tribunal observed that- On the second issue regarding denial of credit on capital goods on the ground that no credit is available prior to the commencement of production, we note that the Original Authority relied on the Board Circular dated 26/12/1994. It was clearly recorded in the impugned order that the nature of goods being capital goods as defined under Rule 2 of Cenvat Credit Rules, 2004 is not disputed. The only issue is whether the appellant can take credit before the commencement of production. The Original Authority held that upon completion of installation these capital goods become immovable and are non-excisable. Further, credit is admissible only on capital goods when the appellant commences production. First of all, we note circular dated 26/12/1994 relied upon by the Original Authority has no relevance to the dispute at hand. The said circular de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stainable. Accordingly, we find the appellant s eligibility for credit cannot be denied. 7. Issue No.3 : On the third issue regarding denial of credit on input services for construction of factory by the appellant, we note that the appellants availed credit of service tax paid on various input services like works contract service, GTA, telephone, security service, consulting engineering service, rent a cab operator service etc. These credits were denied by the Original Authority on the ground that credit on input services can be allowed only if used for provision of a service liable to service tax or manufacture of goods liable to excise duty. Reliance was placed on Board circular dated 04/01/2008. We note that the reliance placed by the Original Authority on the said circular is misplaced and not appropriate. The said circular dealt with specifically commercial or industrial construction service and renting of immovable property service . Presently, we are dealing with various input services availed by the appellant to set up their production factory. Input service in terms of Rule 2 (l) of Cenvat Credit Rules, 2004 means any service used by the manufacturer wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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