TaxTMI 
TaxTMI 
2026 (2) TMI 234
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....sed transit mixers and chassis, separately on payment of central excise duty of Rs.41,87,562/-. The appellant availed CENVAT Credit on the said capital goods i.e., transit mixers and chassis, used for providing 'supply of tangible goods for use' service and declared the same in the Return filed by them in the month of June, 2008. 3. A Show Cause Notice was issued to the appellant on 12.11.2012 denying the CENVAT Credit of Rs.41,87,562/- (inclusive of cesses) availed by them and proposing recovery thereof, on the ground that 'supply of tangible goods for use' was a non-taxable service during the period from 2006-07 to 2007-08, during which period the appellant had acquired transit mixers and chassis. Thus, in terms of Rule 3 of the CENVAT Credit Rules, 2004, it was alleged that the above CENVAT Credit availed by the appellant on capital goods was irregular. 3.1. The said Notice was adjudicated by the Ld. Additional Commissioner of Service Tax, Kolkata vide Order-in-Original No. 08/ADC/ST/Kol/2014-15 dated 28.05.2014 wherein the ld. adjudicating authority has confirmed the disallowance of CENVAT Credit of Rs.41,87,562/-, as availed by the appellant and demanded interest thereon....
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....e operational only after 16.05.2008. Even thereafter, the machines were put to use only if the work front was ready and service orders were in hand; otherwise, they were kept idle at the yard. Thus, prior to commissioning, and even thereafter in the absence of work orders, the machines were not used for providing either taxable or exempted services. (vi) In accordance with Rule 3 of the CENVAT Credit Rules, the appellant rightly availed CENVAT credit only after the machines were commissioned and ready for use. The credit was accordingly reflected in the Service Tax return for June 2008. The findings of the ld. adjudicating officer, which are based solely on the date of purchase and ignored the crucial aspect of commissioning and readiness for use, are legally unsustainable. (vii) This legal position stands fortified by the decision of the Tribunal in the case of Commissioner of C.G.S.T. and C.Ex., Bhubaneswar v. M/s. Hindustan Coca Cola Beverage Pvt. Ltd. [decided vide Final Order No. 77803 of 2025 on 26.11.2025 in Excise Appeal No. 76072 of 2018 - CESTAT, Kolkata] 4.1. The appellant further submits that Rule 4(2)(a) and Rule 4(2)(b) of the CENVAT Credit Rules,....
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..... Admittedly, the appellant has purchased the truck/trailer chassis separately from M/s. Ashok Leyland Ltd. and the concrete transit mixers separately from M/s. Schwing Stetter (India) Pvt. Ltd. in respect of multiple machines. We take note of the fact that upon delivery, the chassis and concrete transit mixers had no independent or standalone utility for the appellant. Until their mounting, balancing and subsequent certification, the capital goods remained commercially unusable. It is pertinent to note that unless and until the procedure of mounting of the mixers on the chassis was complete, along with balancing, alignment, calibration, and installation of ancillary components thereof, followed by final commissioning of the said assembly / equipment and issuance of commissioning / commencement reports thereafter, the said machines had no operational value and could not be deployed for providing any service. The Flow Chart submitted by the appellant to illustrate the process of assembly of the concrete mixer, is reproduced below: - 8.1. From the Flow Chart reproduced above, it can be seen that the fully finished vehicle ready for use has entered into existence only after commiss....
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....cement of the production on such capital goods, the same final product became dutiable. This is the second round of appeal before this Tribunal after remand vide order dated 08.03.2022. The said order is reproduced below: .... 5.1. As per our view even if the goods per se were exempted during the receipt and installation of the capital goods but if the said capital goods were not put to use for manufacture of any exempted goods it cannot be said that the said capital goods were used exclusively for manufacture of exempted goods in terms of Rule 6(4) of Cenvat Credit Rules, 2004. The revenue has heavily relied upon the decision in the case of Surya Roshni Ltd-2003(155) ELT 481 (Tri-Del) on the ground that the same was upheld by the Supreme Court but the factual position as submitted by the Learned Senior Counsel is that though the Tribunal had decided the matter against the assessee and the appellant in that case has approached the Supreme Court. The Hon'ble Supreme Court dismissed on the ground of jurisdiction thereafter, the appellant filed an application under Section 35(H) (1) of Central Excise Act, 1944 which is not yet decided. Therefore, firstly the judg....
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....r the purpose of Rule 6(4) CENVAT Credit Rules, 2004 the date of production of the goods has to be taken that whether on that date finished goods were dutiable or exempted. Therefore on that point the issue stand settled by this Tribunal in this case itself. The Adjudicating Authority was having limited scope to verify the date of commencement production and the status of exemption or dutiable of the said goods as on date of production. Therefore, the order of the Adjudicating Authority in the remand proceeding visiting to the legal issue is absolutely illegal and incorrect particularly for the reason that the revenue has not challenged the views taken by this Tribunal in the order dated 08.03.2022. Having said so, now we examine the fact for which the matter was remanded. We find that the appellant in their daily production record first time shown production of Maaza pet 600 ML bottles on 29.03.2011 before that in the months of January and February, 2011, the production of Maaza RGB was shown as goods produced which are not manufactured on the capital goods in question as the capital goods in the present case are meant for production of Maaza in PET bottles. Therefore, it is quite....
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....d by the Revenue." 11. We have also examined the case-law relied upon by the Revenue in the cases of M/s. Surya Roshni Ltd. [2003 (059) RLT F8 (SC)] and M/s. Spenta International Ltd. v. Commissioner of C.Ex., Thane [2007 (08) LCX 0003 (CESTAT, Mumbai)] as per which the availability of credit on capital goods is to be determined at the time of receipt of the capital goods. Having gone through the same, we are of the view the said decisions are not applicable to the facts and circumstances of the present case because the capital goods, for use, in this case, were not in existence prior to June, 2008. In the present case, the chassis and concrete transit mixers, purchased separately, had no independent or standalone utility for the appellant. By their very nature, the chassis and the mixers are incapable of being used for any service unless the mixers are duly mounted on the chassis, balanced, calibrated, and certified by the vendor. Until such mounting and certification, the capital goods remained incomplete, non-functional, and commercially unusable. Thereafter, engineers carried out mounting of the mixers on the chassis, followed by balancing, alignment, calibration, and instal....