2011 (8) TMI 550

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....was given to the jurisdictional Superintendent of Central Excise who informed that appellant is not eligible for the credit. However, the appellant replied stating that since they are manufacturer and motor vehicles are capital goods and therefore they are eligible for the credit. A show cause notice was issued and proceedings were initiated thereafter. In the proceedings before lower authorities, cenvat credit taken by the appellant with interest has been demanded. Learned consultant appearing for the appellants submitted that appellant is to be treated as provider of Goods Transport Agency service in view of the provisions of Section 68 (2) of Finance Act, 1994 (The act) and the definition of output service in Cenvat Credit Rules. In view....

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.... provisions of Section 68(2) of the Act and definition of output services and hence appellant is eligible for cenvat credit of duty paid on motor vehicles. Section 68 (2) of the Act reads as under:-   SECTION [68. Payment of service tax (1) Every person providing taxable service to any person shall pay service tax at the rate specified in Section 66 in such manner and within such period as may be specified.   (2) Notwithstanding anything contained in sub-Section (1), in respect of any taxable service notified by the Central Government in the Official Gazette, the service tax thereon shall be paid by such person and in such manner as may be prescribed at the rate specified in Section 66 and all the provisions of this Chapter ....

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....ible.   5. Further, we had to examine availment of cenvat credit in the light of provisions relating to availment of cenvat credit and not merely looking at the definition of provider and person liable to pay service tax. Every person who is providing service or paying service tax does not automatically become eligible for cenvat credit on all inputs/ capital goods/ input services.   6. According to Rule 3 of Central Credit Rules 2004, the provider of taxable service is allowed to take cenvat credit of various types of duties paid on input or capital goods received in the factory. According to definition of capital goods, credit of duty paid on motor vehicles is available only when the same is registered in the name of provi....