TaxTMI 
TaxTMI 
2026 (6) TMI 956
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....ax bearing ST Registration No. AACCC6296PSD001, engaged in rendering services under the categories of 'mining of mineral, oil or gas service' and 'goods transport agency service'. During the period from February, 2010 to March, 2010, the appellant had purchased 25 Volvo Make Tippers under the cover of excisable invoices. CENVAT Credit on the aforesaid Tippers was availed by the appellant in their Books of Accounts, to be utilized against liabilities towards output services i.e., mining services, to be rendered by them. 3. As per Rule 4(2) of the CENVAT Credit Rules, 2004, the appellant availed CENVAT Credit on such Tippers to the extent of 50% of the credit available in respect of capital goods for the Financial Year in which the goods were received and the balance credit was availed in the subsequent Financial Year. 4. As the appellant obtained Service Tax Registration only on 21.10.2010, the officers of the Department entertained the view that the CENVAT Credit so availed by the appellant, of central excise duty paid on the said Tippers as capital goods, prior to obtaining registration, was inadmissible and thus liable to be reversed. 5. On the basis of the above allegat....
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....the said vehicles by recording in their Books of Accounts during February and March, 2010, the appellant had filed ST-3 Returns for the period from October, 2009 to March, 2010 disclosing the entire availment of credit therein. It has also been submitted by the appellant that they started utilizing the disputed CENVAT Credit only from May, 2011 onwards; that they have ensured that only 50% of the credit was utilized during the said Financial Year, in terms of Rule 4(2)(a) of the CENVAT Credit Rules, 2004. Accordingly, it is the appellant's stand that they have not violated any of the provisions contained in the CENVAT Credit Rules, 2004. 6.2. Furthermore, it is also submitted by the appellant that the entire CENVAT Credit availed on the Tippers was duly reflected in the statutory ST-3 Returns filed by them for the period from October, 2009 to March 2010; the instant Show Cause Notice has been issued only in April, 2015, nearly three years after the Service Tax Audit was conducted in the year 2012. It is the appellant's submission on this score that despite complete disclosure in statutory returns and despite departmental audit/investigation on the same issue, the Show Cause Noti....
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....ENVAT Credit availed prior to 22.06.2010. We find force in the appellant's submission that the vehicles received cannot be put to use unless their registrations under the Motor Vehicles Act, 1988. It is an admitted fact that the said vehicles were registered by the appellant after 22.06.2010. In fact, the appellant has specifically submitted that they had started utilizing the disputed CENVAT Credit only from May, 2011 onwards, i.e., after 22.06.2010, when Tippers were included in the definition of capital goods. Thus, considering the fact that the said vehicles/Tippers were registered and put to use only after 22.06.2010, we do not find any infirmity in the availment of credit on such Tippers by the appellant. 9.2. We also find that the appellant has utilized only 50% of the credit during the Financial Year in which the goods were received, in terms of Rule 4(2) of the CENVAT Credit Rules, 2004. 9.3. Moreover, we take note of the fact that CENVAT Credit is a substantial benefit given to taxpayers and the same cannot be denied merely on account of procedural infractions or technical grounds if the assessee is otherwise entitled to the same. There is no dispute that duty been ....
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....ated 23.10.2008, which reads as under: "Supply of tangible goods including machinery, equipments and appliance for use, without transferring right of possession and effective control of such tangible goods is a taxable service in terms of provision of Section 65(105) (zzzzj) of the Finance Act, 1994. In some case, vehicles, aircrafts, vessels, etc., are also supplied in the above manner and such activities also fall under the said taxable service. In this regard, a doubt has arisen whether the credit of Excise duty/Additional duty of Customs (commonly known as CVD) paid on such items are available to the provider of such taxable service and if so whether such goods should be considered as 'inputs' or 'capital goods', for the purposes of the Cenvat Credit Rules, 2004. 2. The matter has been examined. It is possible that some of such goods may either fall within the definition of 'capital goods' or may not be covered under the said definition. However, as these goods are primary requirements for providing the above mentioned 'output services' for such service providers, the goods including vehicles, aircrafts, vessels, etc., are in th....
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....upply of tangible goods viz., dumpers and tippers, etc., will need to be considered as primary requirements for providing the said output service, and hence such vehicles will be in the nature of inputs for the purposes of Cenvat Credit Rules, 2004. This being so, the denial of the credit on the said vehicles by lower authority falls foul of the Board's Circular. The determination of service tax liability in respect of supply of tangible goods service will therefore, require to be predetermined after taking into account eligible input credit on the aforesaid items used by the appellant as primary requirements for providing supply of tangible goods service." 10. Therefore, in view of the discussions hereinabove and by relying on the ratio of the decisions cited supra, we are of the view that the CENVAT Credit has been rightly availed by the appellant on the Tippers in question and the same cannot be denied on the ground that the said vehicles/Tippers were received prior to 22.06.2010. Accordingly, we do not find any merit in the impugned order upholding the disallowance of CENVAT Credit availed by the appellant on the said Tippers. 11. We further find considerable force in the....