AI Drafter 
TaxTMI 
TaxTMI 
2017 (9) TMI 268
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....the appellant and Sh. S.C. Saini, AR for the Revenue. 3. After hearing both the sides and on perusal of the record it appears that - (a) the first issue in the present appeal is pertaining to an amount of Rs. 2,51,34,068/- availed as credit on goods used for fabrication of plant and machinery is not available as the appellant was not the manufacturer of the 'capital goods'. The contractor who executed the work is the manufacturer. (b) an amount of Rs. 12,54,71,323/- availed as credit on capital goods was sought to be denied on the ground that the appellant could not have taken the credit on these capital goods as they have not commenced production at the relevant time; (c) an amount of Rs. 5,86,62,803/- availed as credit....
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....l 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 to be considered as parts of the relevant machines. The definition of 'Capital Goods' includes, components, spares and accessories of such capital goods. Accordingly, applying the "User Test" to the facts in hand, we have no hesitation in holding that the structural items used in the fabrication of support structures would fall within ....
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....Sugar - 2015-TIOL-1734-HC-Mad.CX held that credit on M.S. Plates, angles, channels utilized in construction / erection of plant were eligible for credit. The High Court observed that the principle laid-down by the Hon'ble Supreme Court in Rajasthan Spinning and Weaving Mills Ltd. (supra) is applicable to such situation. 7. We note that the Tribunal has been consistently following the ratio that the steel items when they are used in fabrication of capital goods and their accessories inside the manufacturer premises are eligible for credit 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 Ent....
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....p of the plant. Apparently after setting up of such plant only, production of final product can commence. The appellant necessarily has to keep account of all the duty paid capital goods alongwith quantum of eligible credit on such capital goods. It is not the case of the Revenue that the appellants have utilized any of the credit availed on this capital goods before the commencement of production. It is clear that such utilization is possible only when dutiable final products are manufactured and cleared by the appellant. Hence, keeping a record of all the credits available will necessarily help both the Revenue and the appellant for proper accounting and verification of such credit. Regarding the observation recorded by the Original Autho....
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....y 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....