2026-VIL-259-CESTAT-KOL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Availment of CENVAT credit on capital goods - Date of start of production vs date of receipt of capital goods - Appellant availed CENVAT credit on transit mixers and chassis purchased prior to 16.05.2008, when the service of 'supply of tangible goods for use' became taxable. Revenue denied the credit on the ground that the capital goods were purchased during the period when the service was non-taxable - Whether the appellant is entitled to avail the CENVAT credit on the capital goods purchased prior to the service becoming taxable - HELD - The chassis and concrete transit mixers had no independent or standalone utility for the appellant until they were mounted, balanced, calibrated, and certified by the vendor. The fully finished vehicle ready for use came into existence only after the commissioning of the capital goods, which happened after 16.05.2008 when the service became taxable. The eligibility of credit on capital goods has to be taken as on the date of start of production, and not the date of receipt of the capital goods - It is on record that the appellant has supplied the tangible goods, for use, after the same were fully commissioned by the appropriate authority. Therefore, the CENVAT Credit on capital goods was availed by the appellant only after ‘supply of tangible goods for use’ came into existence as a taxable service. The appellant has rightly availed credit on capital goods after 16.05.2008, when ‘supply of tangible goods for use’ became taxable - The impugned order is set aside and the appeal is allowed
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