CENVAT credit can be availed on capital goods received in the premises of service provider only after the services became taxable.

The respondents were brought into service tax net with effect from 16-6-2005. They availed CENVAT credit on capital goods received in the premises of service provider on 5-5-2005 i.e. prior to services became taxable.

Held:

Decision delivered by Gujarat High Court in case of Gujarat Propack 2009 (234) ELT 409 (Guj) was not applicable to the present case as the facts of the case were completely different. Following the decision delivered by larger Bench of the Tribunal in case of Spenta International Ltd. 2007 (216) ELT 133 (Tri.-LB), it was held that CENVAT credit was available in respect of capital goods received in the premises of service provider only after the goods became dutiable and therefore, the respondents were not eligible for the said CENVAT credit on capital goods received prior to the date of the service becoming taxable.