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TMI Blog2009 (9) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... for the Appellant. Ms. Joy Kumari Chander for the Respondent. ORDER M.V. Ravindran, Judicial Member - This appeal is directed against Order-in-Original No. 6/2008-ST, dated 7-6-2008. The brief facts of the case are as follows : Shri Ganta Ramanaiah Naidu, Door No. 16-3-1632, Harnathapuram, Nellore-524 003 (hereinafter referred to as the "assessee") is registered under section 69 of the Finance Act, 1994 (hereinafter referred to as "the Act") under the category of "Site Formation and Clearance Service" under the Service Tax Registration No. ACVPG8190NST001 obtained on 27-3-2006. The assessee is engaged in providing the services of blast-hole drilling, blasting, excavation, loading, transport, spreading, dumping, etc., of the over burden by using machine at Open Cast Mines and also undertaking similar activities which is a taxable service specified under sub-section (105)(zzza) to section 65 of the Act, as amended. The assessee is availing Cenvat Credit on capital goods and input services to pay the Service Tax due. 2. After asking for clarifications from the appellant, the lower authorities on not receiving any clarifications from the appellants issued a show-cause no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants also took up a point that the correct classification of the tippers is already decided by the Tribunal as not falling under Chapter 87 and hence they were correct in taking the credit. 4. Adjudicating Authority .after granting personal hearing and also considering the submissions made by the appellant before him during personal hearing and reply to the show-cause notice, came to the conclusion that the appellants have availed ineligible credit on the tippers and hence they are not eligible for the credit of duty paid on such tippers. Coming to such a conclusion the adjudicating authority passed the following order : "(a) Under Rule 14 of Cenvat Credit Rules, 2004 read with section 73 of the Finance Act, 1994, I determine that the Noticee had taken an ineligible credit of Rs. 1,66,36,883 (Rupees one crore sixty six lakhs thirty six thousand eight hundred and eighty three only) on the Tippers during June, 2005 to September, 2007 and availed the same for Service Tax payment and I therefore order them to pay the same back with interest thereupon. (b) I also determine that interest under Rule 14 of the Credit Rules read with section 75 of the Act should be paid by them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tipper will be of no consequence. It is his submission that if the classification of the tipper is decided as 8428.90 by the Tribunal, in the above referred case, then the benefit of Cenvat Credit on the capital goods cannot be denied to the appellant. He would also submit that tippers would certainly qualify as input for the purpose of providing taxable service. It is his submission that the definition of input is very wide and covers goods that are used in or in relation to the manufacturing either directly or indirectly. He would submit that as such tippers are used for clearing the materials on site and the out put service which is taxed by the authorities as site clearance, demolition etc. services. Therefore, usage of tipper is absolutely indispensable in providing output service by the appellant. It is also his submission that it is commercially inexpedient to carry out site clearance activities without tippers. He would rely upon the following decisions in support of abovesaid propositions : (1) J.K. Cotton Spg. Wvg. Mills Co. Ltd. v. STO 1997 (91) ELT 34 (SC). (2) Collector of Central Excise v. Eastend Paper Industries Ltd. 1989 (43) ELT 201 (SC). (3) Collector of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid down by the Larger Bench, the usage of tipper in the services provided by the appellant is indispensable and hence the credit may be allowed. 9. Learned JCDR on the other hand would argue that the adjudication order clearly enumerates the definition of capital goods. It is her submission that the definition of capital goods such as goods which are falling under Chapters 82, 84, 85 and 90 which are used for providing taxable services could only be capital goods . It is her submission that the tippers which have been procured by the appellants categorically fall under Chapter 87. Hence they do not qualify as capital goods for taking credit. It is also her submission that motor vehicles registered in the name of the provider of the output service are not eligible for Cenvat Credit. But the output service has to be the service which has been enumerated under Rule 2(a)(A) or (B). It is also her submission that the definition of inputs as has been sought to be interpreted by the learned counsel is totally inconsistent as the said definition very clearly indicates that the input means exclusion of motor vehicles. It is her submission that all the case laws which have been cited and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apital goods' means:— (A) the following goods, namely :— (i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading 6805, grinding wheels and the like, and parts thereof falling under heading 6804 of the First Schedule to the Excise Tariff Act; (ii) Pollution control equipment; (iii) components, spares and accessories of the goods specified at (i) and (iv); (iv) moulds and dies, jigs and fixtures; (v) refractories and refractory materials; (vi) tubes and pipes and fittings thereof; and (vii) storage tank, used— (1) in the factory of the manufacturer of the final products, but does not include any equipment or appliance used in an office; or (2) for providing output service; (B) motor vehicles registered in the name of provider of output service for providing taxable service as specified in sub-clauses (f), (n), (o), (zr), (zzp), (zzt) and (zzw) of clause (105) of section 65 of the Finance Act;" "(k) 'input' means (i) all goods, except light diesel oil, high speed diesel oil and motor spirit, commonly known as petrol, used in or/in relation to the manufacture of final products whether directly or indirectly and whether contained in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tippers would be classified under Chapter 84. Since there is a bona fide belief, we are of the considered view that the penalty imposed on the appellant is liable to be set aside and we do so. 14. As regards the interest under Rule 14 of the Cenvat Credit Rules read with section 75 of the Act, we find that the said interest is also unwarranted as it is the contention of the appellant that sufficient balance was available in the Cenvat Credit at the relevant period, i.e., say the appellant has not utilized the credit availed by them and it was in records as credit only. We find from the OIO that the appellants contention that they had only availed credit but not utilized the same for payment of service tax has not been disputed by the adjudicating authority nor there is any finding contrary to the submission made by the appellant before him. If that be so, the decision in the case of Gokaldas Images (P.) Ltd. v. CCE 2008 (227) ELT 448 (Trib. - Bang.) will squarely cover the issue as it was held, that entries remain merely as entries without any effect on Government's revenue and credit was reversed immediately. Hence, the demand of interest was not justified in view of this judici ..... X X X X Extracts X X X X X X X X Extracts X X X X
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