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of <h1>HCCL's CVD Credit on Aircraft Ineligible for Cenvat Credit Due to Initial Service Tax Exemption; Rule Clarification Needed.</h1> Hindustan Construction Company Limited (HCCL) imported an aircraft and paid Customs duty (CVD). The aircraft was hired out without transferring possession or control, initially exempt from service tax until May 16, 2008, when such activity became taxable. HCCL requested to use CVD credit to pay service tax, suggesting an amendment to the Cenvat Credit Rules, 2004 to include aircraft as capital goods. However, since the service was initially exempt, the CVD credit was ineligible from the start and remains so. Therefore, no Cenvat credit should be taken for the CVD paid on the aircraft. This information should be shared with trade associations.
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