2018 (8) TMI 104

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....of Finance Act, 1994, and is accordingly registered under Service Tax. During an audit, the Department observed that the appellant have taken credit on duty of excise paid on office equipments, tables, chairs, split air conditioners, power plant battery, HDPE cables, equipments, miscellaneous window cooled sets, air conditioner EA sets, W/C diesel EA as detailed in Annexure A of the Show Cause Notice during the period October 2005 to 31.03.2006, and the remaining 50% credit has been taken by the appellant during the next Financial Year deeming all those Articles as capital goods and utilizing the same and discharging the Service Tax liability on the taxable services rendered by them. A Show Cause Notice dated 08.04.2011 was served upon them....

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....learned DR that Cenvat Credit is denied on the office equipments. While impressing upon Para 15.3 of the order under challenge, it is submitted that the adjudicating authority has been judicious and reasonable while distinguishing the goods of Annexure A to Show Cause Notice as to what can be used as a proper input and what cannot be used. Justifying those findings, the learned DR has prayed for dismissal of the appeal. 6. After hearing both the both the parties, we are of the opinion that the Cenvat Credits can be availed on the capital goods as per Rule 2(a)(A) and (B) of Cenvat Credit Rules, 2004. As per the provision of this Rule the "capital goods" means as follows: (i) All goods falling under Chapter 82, Chapter 84, Chapte....

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....r. As work „component‟ is not defined in Central Excise Act or Rules framed thereunder, its dictionary meaning has to be considered for Rule 2(a)(A)(iii) of Cenvat Credit Rules, 2004. [para 30] To qualify as capital goods under Rule 2(a)(A) of Cenvat Credit Rules, 2004, item should be a component or accessory of any of goods mentioned in sub-clause (i) or (ii) thereof, before it is used for providing of output services. Since office chairs used by telecom service providers are classifiable under Chapter 94 of Central Excise Tariff which is not specified in Rule 2(a)(A)(i) of Cenvat Credit Rules, 2004. In that view, they are not capital goods on which credit could be availed. Also, as there was no evidence of th....