2008 (10) TMI 141

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....) are rendering taxable services including telephone services to their subscribers all over India For rendering such services effectively, they have divided the country into what are called "Secondary Switching Areas' (SSAs) for short. Some of these SSAs coming within the State of Tamil Nadu are Salem, Coimbatore, Trichy and Kumbakonam. M/s. BSNL have a Central Stores Department (CSD, for short) at Madurai, which caters to the said SSAs by way of purchase and supply of capital goods required for the rendering of the above services. The challenge in the appeal is against the CENVAT credit taken by the appellants in SSA Salem on capital goods supplied by the CSD, Madurai and covered by copies of manufacturer's invoices. Prior to September, 20....

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.... learned SDR also, who refers to the definition of "first stage dealer" given under Rule 2 of the CENVAT Credit Rules, 2004 as also to the various 'Cenvatable' documents specified under Rule 9 of the said rules. It is submitted that, during the period of dispute, the transfer of capital goods from CSD, Madurai to SSA Salem had not taken place under any of the 'Cenvatable' documents specified under Rule 9 ibid. It is submitted that, where the relevant statutory rule prescribes a document for availment of CENVAT credit on capital goods, the benefit can be availed only on the strength of such document and not otherwise. In this manner, the learned SDR has sought to defend the order of the Commissioner (Appeals). 4. We have considered the sub....

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....pital goods is admissible to a provider of output service in respect of capital goods received from a first stage dealer under cover of an invoice issued by the latter. Strictly speaking, a "first stage dealer" is one who has purchased goods from its manufacturer and sells it for a consideration. Undisputedly, in the present case, CSD, Madurai did not sell capital goods to SSA Salem and hence did not fit in the definition of "first stage dealer". Nevertheless, the department has treated them as first stage dealer in respect of similar transactions after 23.09.2005. Apparently, the department chose to go by the factum of registration of CSD, Madurai as "first stage dealer". In other words, since 23.09.2005, the service tax authorities have n....