We have engaged M/s.Janashakti Transport for supplying us Bulker vehicles on rent basis for shifting of coal within the plant premises and the service provider is raising invoice on us charging service tax under the category “Supply of tangible goods for use Service” with description of service as “Hiring of bulker for Coal shifting for the period from 01.08.2015 to 31.08.2015.
As per the provisions of Rule 2(l)(B) of the Cenvat Credit Rules, 2004, services provided by way of renting of motor vehicle in so far as they relates to motor vehicle which are not capital goods has been excluded from the definition of input service.
Rule 2(A)[viii] of Cenvat Credit rules states that [(viii) motor vehicles other than those falling under tariff headings 8702, 8703, 8704, 8711 and their chassis [but including dumpers and tippers]] to be capital goods. Meaning motor vehicles falling under chapter ID 8702, 8703, 8704 8711 and their chesis except dumpers and tippers are to be excluded from the definition of capital goods.
Bulkers are specialized vehicles used for transportation of fine powdered articles like cement, GGBS, Flyash, Grains or liquid in Bulk quantity and are classified under chapter Heading 8704.
In light of the above, kindly clarify whether service tax charged by the service provider in respect of shifting of coal in bulkers within the plant premises are eligible for Cenvat Credit.
It is worthy to note here that coal is an important raw material which is used for firing of the Kiln said to be heart of Cement Plant where calcinations of crushed lime stone along with other admixtures takes place at a very high temperature to manufacture clinker, an intermediate product, required for manufacture of Cement.