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TMI Blog2021 (8) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... per the impugned order, two conditions have to be fulfilled for capital goods to claim CENVAT credit as mentioned in Rule 2(a) (A) of CCR, 2004 for eligibility of credit (a) They should fall under the category mentioned in Rule 2(a)(A), (b) They should be used as mentioned in Rule 2(a)(A) whereas as per the Commissioner, only first condition is satisfied and as per the learned Commissioner, the entire works contract is not service, only service portion in works contract is service which is evident by section 66E(h) of the Finance Act, 1994. The lift is essential for providing the output service and therefore, the appellant has fulfilled both the conditions to avail the credit, hence the denial of credit is not sustainable, simply becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Service Tax and are paying service tax as a provider and as a recipient of taxable services and they are also availing CENVAT credit of the duty/tax paid on input services and capital goods in terms of CENVAT Credit Rules, 2004. The appellant is engaged in the construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration is received after issuance of completion-certificate by the competent authority. The Appellant imported passenger lifts vide bill no 5511702/04/06/2016 and availed the credit of CVD paid. During the scrutiny of records by the department audit team, the availment of credit on passenger lifts w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Toubro, 2015 (39) STR 913 (SC), wherein it was held that assessee was correct in their submission that a works contract is a separate species of contract distinct from contracts for services simpliciter recognized by the world of commerce and law as such, and has to be taxed separately as such. He also referred to the decision in the case of Emaar MGF Construction Pvt Ltd Vs CCE 2020 (34) GSTL 509 (Tri-del), wherein it was held that judgment of the Supreme Court in Larsen Toubro that a Composite Works Contract cannot be taxed under Commercial Construction Services under Section 65(105)(zzzh) as the scope is limited to cover contract of service simplicitor only. He also placed reliance in the case of CCE Vs ICl Sugar Ltd 2011 (271) ELT 36 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia Ltd Vs CCE Pune [2015(315) ELT 63 (Tri-Mum)] f) Asian Colour Coated Ispat Ltd. Vs CCE Delhi [2015(317) ELT 538 (Tri- Del) 4.1. He further submitted that the capital goods are used for providing output services. He also submitted that imported lifts are mandated for the construction of building and therefore the appellant has used the capital goods for providing output service/ works contract service. In terms of Service Tax Determination of Value Rules, once an Appellant is engaged in providing works contract service, such service provider is entitled to credit on input services and on capital goods but the impugned order has travelled beyond the Rule book to come out with a jurisprudence that there exists two distinct portio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n input service and capital goods. He also submitted that lift is one of the common facilities provided in the project and same is clearly mentioned in the construction agreements. He further submitted that the entire value of construction including common facilities are considered for payment of service tax and lifts which are capital goods are being used for providing taxable services on which service tax is being paid by the appellant. Therefore, denying the benefit of CENVAT credit on capital goods is not proper. As far as interest and penalty is concerned, the learned Consultant submitted that once they are eligible for credit, the question of interest and penalty does not arise. 5. On the other hand, learned AR defended the impugne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of building and therefore the appellant has used the capital goods for providing output service and this artificial bifurcation resorted to by the authorities, is beyond the statutory provision and the basis of denying the credit is not proper because the appellant has fulfilled the conditions in terms of Rule 2(p) of CCR which defines output service and as the lift is not used for providing the service specified in the Negative List and whole of the service tax is not paid by the recipient of service thereby the appellant has used the lift for providing the output service. I also find that the lift is essential for providing the output service and therefore, the appellant has fulfilled both the conditions to avail the credit, hence th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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