Supply of tangible goods service - Credit on 'Tangible goods' supplied during the course of providing taxable service under section 65(105)(zzzzj) - Central Excise - 137/120/2008-CX.4

DATED 23-10-2008 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 the nature of 'inputs'. Its emphasized here that this clarification is valid only when the output service is in the nature of service defined under the provisions of section 65(105)(zzzzj) of the Finance Act, 1994 and the goods in question are the tangible goods supplied during the course of providing the taxable service. [ F.NO. 137/120/2008-CX.4]