#Capital Goods

The tribunal ruled that imported spares and accessories used for modernising coke-oven plants fall within the definition of capital goods under Notification 104/2009, entitling the importer to SHIS duty credit. This interpretation overturns the earlier duty demand of Rs 1.30 million and benefits exporters-turn-importers seeking capital-goods exemptions.

CESTAT Kolkata ruled that CENVAT credit on capital goods like tippers is valid if used for taxable services after registration, even if purchased and received earlier. This removes the department’s arbitrary denial of credit based on pre-registration acquisition, empowering service providers to claim rightful input tax credits without being penalized for timing mismatches.

CESTAT Hyderabad has ruled that CENVAT credit can be availed on duty-paid capital goods used in manufacturing, even when those goods are owned by a third party under lease and permanently installed in the factory. This clarifies that ownership, not usage or immovability, is not a barrier to credit - a critical win for manufacturers relying on leased infrastructure.

CESTAT Chandigarh rules that Cenvat credit on capital goods for a captive power plant is valid if any portion of the generated electricity directly supports dutiable manufacturing, rejecting the Department’s argument that immovability or partial sale to third parties disqualifies the credit. This clarifies a critical ambiguity for industries relying on captive power, expanding eligibility beyond purely internal consumption.

CESTAT Chennai rules that job workers can avail Cenvat credit on capital goods invoiced to principals if the goods are received and used in manufacturing, even if not directly purchased. This overturns demands based on technical ownership, clarifying eligibility under Rule 2(k) of Cenvat Credit Rules for contract manufacturers and job work arrangements.

CESTAT Chennai rules that raising invoices for capital goods (moulds) without physical removal from the factory does not constitute 'removal' under Rule 3(5) of the CENVAT Credit Rules, 2004. This holding shields manufacturers from duty reversal obligations solely based on invoicing, reinforcing the need for actual physical removal to attract credit reversal.

CESTAT Chandigarh rules telecom towers qualify as 'goods' under CENVAT Credit Rules, enabling taxpayers to claim input credit. The tribunal also permits transfer of unutilized credit upon shifting to centralized registration, clarifying substantive rights for telecom infrastructure providers.

The CETAT holds that Cenvat credit is permissible on capital goods used for providing taxable services, not just manufacture, clarifying eligibility for storage tanks and fabrication inputs.