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2017 (6) TMI 1071 - AT - Service TaxCENVAT credit - dumpers / tippers falling under Chapter 87 - The department was of the view that dumpers /tippers were classifiable under Chapter 87 as motor vehicles and were not falling within the category of capital goods - The department further alleges that such cenvat credits were availed on the basis of deficient and improper invoices during the period 2005-2006 to 2008-2009 - Held that - Dumpers/Tippers are vehicles which are specially designed for earth moving purposes and are meant to be used in the mining area - Consequently, the appellant would be eligible for cenvat credit on dumpers / tippers as inputs which are used for providing the output service. However, the controversy stand resolved with effect from 22.6.2010 with issue of N/N. 25/2010-CE which has amended the Cenvat Credit Rules to allow cenvat credit for dumpers / tippers registered in the name of service provider for providing taxable service for providing site formation etc. The Cenvat credit has also been disallowed on the ground that the credit has been availed on the basis of deficient and improper invoices. Further, the appellant is also said to be not in possession of the original /duplicate invoices based on which the such credit can be availed. We are of the view that issue needs to be re-examined by the original adjudicating authority. Appeal allowed by way of remand.
Issues:
Dispute over availment of Cenvat Credit on dumpers/tippers under Chapter 87 as capital goods; Allegations of improper invoices leading to disallowance of credit and imposition of penalty. Analysis: Issue 1: Classification of Dumpers/Tippers and Availment of Cenvat Credit The appellant, engaged in site formation and other services, availed Cenvat Credit on dumpers/tippers under Chapter 87 as capital goods. The department contended that these vehicles were not capital goods and credits were based on deficient invoices. The appellant argued that dumpers were machinery used for output services and should be considered as inputs under Rule 2(k) of the Cenvat Credit Rules, 2004. The Tribunal found that dumpers, even if under Chapter 87, could be classified as inputs for output services, as per Rule 2(k)(ii). The appellant's use of dumpers for output services supported their claim for Cenvat credit. Issue 2: Interpretation of Motor Vehicles Act and Previous Judicial Decisions The department argued that dumpers were motor vehicles under Chapter 87, disqualifying them from Cenvat credit. However, the appellant cited the Motor Vehicles Act and a Supreme Court decision (Belani Ores Ltd. vs. State of Orissa) to support their claim that dumpers were not motor vehicles. The Tribunal agreed with the appellant, stating that dumpers designed for earth moving in mining areas were not motor vehicles. This interpretation allowed the appellant to claim Cenvat credit for dumpers as inputs used for output services. Issue 3: Disallowance of Credit due to Deficient Invoices The department disallowed Cenvat credit due to alleged deficient and improper invoices, with the appellant unable to produce original/duplicate copies. The Tribunal directed a re-examination by the adjudicating authority, requiring the appellant to provide relevant documents supporting the credit claim. The authority was tasked with verifying the documents to ensure compliance with essential details for availing Cenvat credit. Upon satisfaction, the credit would be allowed in denovo adjudication proceedings, resolving the issue of deficient invoices. In conclusion, the Tribunal remanded the matter for a denovo decision after due verification, addressing the classification of dumpers/tippers, interpretation of the Motor Vehicles Act, and the issue of deficient invoices. The judgment clarified the eligibility of dumpers for Cenvat credit as inputs used for output services, emphasizing compliance with documentation requirements for credit availment.
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