Cenvat credit on cables may be allowed as inputs when capital goods classification fails, with document-based input service credit remanded.

Cenvat credit on cables was held admissible where the cables were used in providing output service, and credit could not be denied merely because they did not qualify as capital goods; the same item could still be treated as input if the scheme requirements were otherwise satisfied. The dispute on input service credit was remanded because the supporting documents produced by the appellant had not been properly examined, and entitlement depended on verification of those records before a fresh order was passed.

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Issues: (i) Whether Cenvat credit on cables could be allowed where the cables did not qualify as capital goods, by treating them as inputs under the Cenvat Credit Rules, 2004. (ii) Whether the matter concerning input service credit required remand for verification of the documents produced by the appellant.

Issue (i): Whether Cenvat credit on cables could be allowed where the cables did not qualify as capital goods, by treating them as inputs under the Cenvat Credit Rules, 2004.

Analysis: The cables were admittedly procured by the appellant and used in providing output service. Credit was therefore not to be denied merely because the goods did not satisfy the definition of capital goods. The Tribunal applied the principle that where an item does not fit within the capital goods category, it may still be eligible as input if the scheme requirements are otherwise satisfied.

Conclusion: Cenvat credit on the cables was admissible to the appellant, whether treated as capital goods or as inputs.

Issue (ii): Whether the matter concerning input service credit required remand for verification of the documents produced by the appellant.

Analysis: The appellant had produced acknowledgment of submission of the relevant documents before the lower appellate authority, but those materials had not been considered. Since entitlement to input service credit depended on verification of the supporting records, further examination was necessary.

Conclusion: The matter was remanded for verification of the documents relating to input service credit and for passing a fresh order in accordance with law.

Final Conclusion: The appellant succeeded on the eligibility of credit on cables, while the dispute regarding input service credit was sent back for factual verification and fresh adjudication.

Ratio Decidendi: Denial of credit cannot rest solely on misclassification of an item as capital goods when the item is otherwise used in providing output service and satisfies the Cenvat credit scheme; documentary eligibility disputes may warrant remand for verification.

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