Capital goods for hotel services can include upkeep equipment used indirectly to render hospitality services and qualify for concessional duty.

Window cleaning equipment imported for hotel upkeep was treated as capital goods required for rendering services under Notification No. 28/97-Cus., because the phrase was read on its plain terms and not limited to goods that directly serve customers. A hotel's service function includes maintaining a clean and well-kept environment, so equipment used for cleanliness and upkeep formed part of the service activity. The concessional duty benefit was therefore available, and the Revenue's challenge failed.

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Issues: Whether window cleaning equipment imported for the upkeep and maintenance of a hotel was covered as capital goods required for rendering services under Notification No. 28/97-Cus. dated 1-1-1997.

Analysis: The notification extended concessional duty to capital goods required for rendering services. The expression was not confined to goods that directly render service to customers. A hotel provides services not only through catering and accommodation, but also through a clean and well-maintained ambience that is essential for attracting and serving customers. Window cleaning equipment used for upkeep of the hotel therefore formed part of the service activity of the hotel. The definition in the notification was applied on its plain terms, and the equipment was held to be covered without importing a restrictive condition that services must be rendered only directly to customers.

Conclusion: The equipment qualified as capital goods under the notification and the exemption was available.

Final Conclusion: The Revenue's challenge failed and the concessional benefit claimed by the assessee was sustained.

Ratio Decidendi: Goods used indirectly and essentially for the rendering of hotel services, including upkeep and cleanliness of the premises, fall within a notification granting concessional duty to capital goods required for rendering services, even if they do not directly serve customers.

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