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TMI Blog2019 (11) TMI 1462X X X X Extracts X X X X X X X X Extracts X X X X ..... is settled law that the noticee cannot be denied an opportunity to rebut the grounds on which proceedings are initiated against them. These aspects need examination before the claim of the appellant on these counts can be accepted. The adjudicating authority appears to have come to the conclusion of taxability under the designated service on the premise that the claim of excisability, without having discharged that obligation, can lead to no conclusion other than that of taxability under Finance Act, 1994 - It is moot whether the contract value in the dispute before us can be vivisected for isolating the tax liability under Finance Act, 1994 and, therefore, needs further examination. Allowance for Depreciation - HELD THAT:- The appellant has submitted that a revised return has been filed under Income Tax Act, 1961 to exclude the claim for depreciation. The adjudicating authority has not accepted the claim of consequent eligibility in the absence of evidence. Nevertheless, the claim of the appellant on this aspect also requires consideration. Matter remanded back to the respective original authorities to assess the claims of the appellant - appeal allowed by way of remand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 65 (25b) of Finance Act, 1994 and hence were not eligible for coverage under CENVAT Credit Rules, 2004. Learned Chartered Accountant appearing for the appellant contested the applicability of rule 6(4) of CENVAT Credit Rules, 2004 which, according to him, could be invoked only if the equipment in question was, or could not be, used for rendering any taxable service. He placed reliance on the decision of the Tribunal in Brindavan Beverages Pvt Ltd v. Commissioner of Central Excise, Meerut [2014 (310) ELT 398 (Tri-Del)]. It was also pointed out that the demand of differential tax of ₹ 1,14,80,780 on erection of Goliath cranes was contrary to law settled by the Tribunal in Neo Structo Construction Ltd v. Commissioner of Central Excise, Surat-I [2010 (19) STR 361] and that the adjudicating authority had failed to take to take note of revised returns filed under Income Tax Act, 1961 after excluding the claim for depreciation on capital goods. 4. Learned Authorised Representative took us through the findings that led to the disputed demand and, according to him, the restriction on availment of credit pertaining to capital goods removed from the premises of the provider of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... initions of input , input service , output , output service and capital goods gives eligibility a logical perspective. The exclusion of levies borne exclusively, or proportionately, on inputs and input service used in the process of manufacture of exempted goods and rendering of exempted services , implicit in the objectives of the scheme, is provided for in rule 6 of CENVAT Credit Rules, 2004. Therefore, a harmonious reading of the two rules leads to the inevitable conclusion that the asserted exclusion in the first and exclusion by prescribed machinery in the latter cannot be stretched beyond the express denial therein. The legislative intent of restriction, whether within the logic of the scheme or otherwise, must be demonstrated by reference to these express provisions. 7. The restriction in rule 6 (4) of CENVAT Credit Rules, 2004 cannot be expanded to cover capital goods utilised for eligible and non-eligible production or rendering of services in the absence of specific legislative sanction. The exclusion machinery incorporated in rule 6 of CENVAT Credit Rules, 2004 by maintenance of record or by computation, is intended to retain the integrity of the schem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ize when this final product becomes dutiable. A question arises as to when capital goods are used for manufacture of dutiable as well as exempted final product, whether for availing capital goods credit, the dutiable as well as exempted final product have to be manufactured simultaneously. In our view this is not necessary, and Cenvat credit would be admissible even if the capital goods are used for manufacture of dutiable goods and exempted goods at different points of time. However, if at the time of receipt of the capital goods, the manufacturer was using the capital goods only for manufacture of fully exempted final product and had no plan or intention to use them for dutiable final products and later on, either the final product becomes dutiable or he changes his plans and starts using the capital goods for manufacture of dutiable final products, the judgment of the Tribunal in the case of CCE, Indore v. Surya Roshni Ltd. (supra) and Spenta International Ltd. v. CCE, Thane (supra) would become applicable. But, if at the time of receipt, the manufacturer had clear intention to use the capital goods for manufacture of dutiable as well as exempted final products, in such a situat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rified vide Boards Circular No. 58/8/2003, dt. 20-6-2003. The extract of the same are reproduced below: A doubt has been raised as to whether charges for erection of plant are covered under the service tax or only commissioning and installation charges. It is clarified that the law specifically provides for taxation of commissioning and installation of plant, machinery or equipment. Thus, all activities other than the commissioning and installation of the plant/machinery/equipment per se, will not be chargeable to service tax. 20. In the Circular No. B2/8/2004-TRU, dt. 10-9-04, as per the changes in the Budget for 2004-2005, the service tax on installation commissioning was extended to erection services also and Board has clarified that erection would refer to civil work to installation/commissioning of a plant or machinery. The extract relating to the clarification is reproduced below: 14. Extension of service tax on installation and commissioning, to erection services: Service tax was levied on commissioning and installation of plant, machinery and equipment w.e.f. 1-7-2003. The general practice is that erection, commissioning and installation are contr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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