Cenvat credit on mining tippers and dumpers accepted where used for output service, with later clarification applied prospectively.

Cenvat credit on tippers and dumpers used in mining operations was treated as admissible where the equipment was used for removal of over-burden in providing output service, because the input definition for a service provider was read broadly and the goods were not treated as motor vehicles for that purpose despite Chapter 87 classification. The later amendment or notification clarifying the position was stated to apply prospectively from 22/06/2010. The amount admitted and paid by the respondent was directed to be appropriated, while the challenge to credit denial on tippers and dumpers failed on merits.

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Issues: (i) Whether Cenvat credit on tippers and dumpers used in mining operations was admissible either as capital goods or as inputs under the Cenvat Credit Rules, 2004; (ii) Whether the amount of Rs. 9,56,453/- admitted by the respondent was liable to be appropriated.

Issue (i): Whether Cenvat credit on tippers and dumpers used in mining operations was admissible either as capital goods or as inputs under the Cenvat Credit Rules, 2004.

Analysis: The dispute was confined to credit taken on tippers and dumpers used for removal of over-burden in mining activity. The Tribunal followed its earlier view that such equipment, though classifiable under Chapter 87, is not to be treated as motor vehicles for the purpose of the input definition applicable to a service provider. It held that goods used for providing output service are covered by the wide wording of the input definition, and that the subsequent amendment/notification brought clarity only prospectively from 22/06/2010.

Conclusion: Cenvat credit on tippers and dumpers was held admissible on merits.

Issue (ii): Whether the amount of Rs. 9,56,453/- admitted by the respondent was liable to be appropriated.

Analysis: The remaining disputed amount was stated by the respondent to have been admitted and paid. In view of that concession, the Tribunal directed appropriation of the amount.

Conclusion: The admitted amount of Rs. 9,56,453/- was ordered to be appropriated.

Final Conclusion: The Revenue's challenge to denial of credit on tippers and dumpers failed, while the admitted credit amount was adjusted, leaving the appeal only partly succeeded to that limited extent.

Ratio Decidendi: For a service provider, goods used for providing output service may qualify as inputs even if they fall under Chapter 87, where they are not motor vehicles for the purpose of the Cenvat Credit Rules, and later clarification applies prospectively.

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