2018 (7) TMI 438 - AT - Service Tax

CENVAT credit - inputs/capital goods - tippers and dumpers used for removing over-burden while preparing the mines for extraction of coal - time limitation - Held that - The issue of eligibility of Cenvat credit on tippers and dumpers already stand decided on merit in favour of the respondent by this Tribunal in the case of Soumya Mining Ltd. 2017 (6) TMI 1071 - CESTAT NEW DELHI , where it was 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 - credit allowed. Time limitation - Held that - As the Cenvat credit is allowable on merit, we do not propose to discuss the issue on time bar. Appeal dismissed - decided against Revenue.

Summary

Issues:
Eligibility of Cenvat credit on tippers and dumpers, Time limitation for Cenvat credit eligibility, Admissibility of Cenvat credit on works contract service.

Eligibility of Cenvat credit on tippers and dumpers:
The appeal concerned the eligibility of Cenvat credit on tippers and dumpers used for mining activities. The Department contended that since these vehicles are classified under Chapter Heading 8704, they should not be eligible for Cenvat credit under Rule 2(a) of the Cenvat Credit Rules, 2004. The Adjudicating Authority had allowed the credit, citing limitation. The Department argued against this decision, emphasizing that the amendment to Rule 2(a) in 2010 should not have retrospective effect. However, the respondent justified their eligibility based on previous Tribunal decisions. The Tribunal examined the issue and referred to the case of Soumya Mining Ltd., where it was held that dumpers could be considered inputs under Rule 2(k) of the Rules, despite being classified under Chapter 87. The Tribunal also discussed the definition of "motor vehicles" and concluded that dumpers used for earth moving purposes in mining areas should be eligible for Cenvat credit.

Time limitation for Cenvat credit eligibility:
The Department argued that the demand for Cenvat credit was not time-barred, citing precedents where the Tribunal upheld findings of suppression by manufacturers. However, the Tribunal found that these findings were specific to the cases in question and did not apply universally. Given the eligibility of Cenvat credit on merit as per the Soumya Mining Ltd. case, the Tribunal decided not to delve into the time limitation issue further.

Admissibility of Cenvat credit on works contract service:
The Revenue raised a ground related to the inadmissible Cenvat credit of a specific amount due to "sheltering in the provision of works contract service." The Adjudicating Authority had not addressed this issue. The respondent acknowledged the credit and had paid the amount. Consequently, the Tribunal ordered the appropriation of the admitted credit. The appeal of the Revenue was rejected except for the specific credit amount admitted by the respondent.

In conclusion, the Tribunal upheld the eligibility of Cenvat credit on tippers and dumpers, referencing relevant legal definitions and precedents. The decision on time limitation was not further discussed due to the merit-based eligibility determination. The issue regarding the specific Cenvat credit amount related to works contract service was resolved by the admission and payment of the credit by the respondent.