2018 (5) TMI 1714 - AT - Service Tax

CENVAT credit - service tax paid on hiring of Cranes, Hydra Cranes, Excavators etc. - denial of credit on the ground that these items are not capital goods as they are Motor Vehicles - applicability of provisions of provisions of rule 2(l) on input services definition and Rule 2(a) of Cenvat Credit Rules, 2004 - Revenue is aggrieved by the impugned order only for the period between dated 01.04.2011 to 31.03.2012 - capital goods or input services - Held that - The Adjudicating Authority after considering the provisions of rule 2(l) on input services definition and Rule 2(a) of Cenvat Credit Rules, 2004 came to conclusion that the said provisions which is dropped eligible to avail Cenvat Credit is not applicable in the respondent case and needs to be upheld. The Adjudicating Authority has held that the allegation in the SCN that since Cranes, Hydra Cranes, Excavators are motor vehicles the same are not eligible capital goods is not acceptable since the eligibility under capital goods to be decided based on the definitions available in the CCR, 2004 read with Central Excise Tariff Act, 1985 - Further it was found from the Rule 2(B) of CCR, 2004 which is referred in the SCN that the said rule does not exclude any goods but only including certain motor vehicles as eligible capital goods, in addition to the goods mentioned at clause (A) of said rule - once the said goods are eligible as capital goods under Rule 2 (a) (A) (i) of CCR, 2004, the clause (B) of said rule has no bearing on their eligibility. Hence, Cranes, Hydra Cranes, Excavators in relation to which the assessee had availed cenvat credit are under Capital goods - The law of availment of Cenvat Credit based upon definition of input services under Rule 2(l) of the Cenvat Credit Rules, 2004, has been correctly appreciated by the Adjudicating Authority and the said findings do not require any interference. Appeal dismissed - decided against Revenue.

Summary

Issues:
Eligibility of Cenvat Credit on service tax paid for hiring of Cranes, Hydra Cranes, Excavators as input services.

Analysis:
The appeal concerned the eligibility of Cenvat Credit on service tax paid for hiring Cranes, Hydra Cranes, Excavators as input services. The Adjudicating Authority initially disallowed the Cenvat Credit availed by the appellant for the period from 01.04.2011 to 31.03.2012, arguing that these items were not capital goods but 'Motor Vehicles.' The appellant contested this decision, leading to a detailed examination of the relevant provisions of the Cenvat Credit Rules, 2004. The Adjudicating Authority's conclusion was challenged by the revenue, asserting that the classification of goods for CCR was incorrect and that the exclusion clause under Rule 2(l) of the Cenvat Credit Rules was not properly applied. Both sides presented their arguments before the Tribunal for consideration.

Upon reviewing the submissions and records, the Tribunal found that the Adjudicating Authority had thoroughly considered the issue and made a correct assessment for the period in question. The Tribunal noted that the revenue was only disputing the decision for the specific period mentioned and not for other periods. The Adjudicating Authority's interpretation of the input services definition under Rule 2(l) of the Cenvat Credit Rules, 2004, was deemed appropriate and in accordance with the law. The Tribunal highlighted the relevant findings that supported the conclusion that the appellant was eligible for the Cenvat Credit on the hiring of Cranes, Hydra Cranes, Excavators during the specified period.

The Tribunal delved into the specific provisions of Rule 2(a) of the Cenvat Credit Rules, 2004, applicable during the relevant period. It analyzed the classification of goods falling under Chapter 84 of the Central Excise Tariff Act, 1985, to determine the eligibility of Cranes, Hydra Cranes, Excavators as capital goods for availing Cenvat Credit. By referencing the statutory provisions and tariff classifications, the Tribunal concluded that these items were indeed eligible as capital goods for Cenvat Credit purposes. The Tribunal rejected the revenue's argument that these items were not eligible capital goods due to their classification as motor vehicles, emphasizing that the eligibility should be determined based on the Cenvat Credit Rules and the Central Excise Tariff Act.

In conclusion, the Tribunal upheld the Adjudicating Authority's decision, affirming the appellant's eligibility for the Cenvat Credit on the hiring of Cranes, Hydra Cranes, Excavators as input services during the specified period. The Tribunal found no grounds for interference with the Adjudicating Authority's interpretation of the relevant legal provisions. Therefore, the appeal was rejected, and the impugned order was upheld.