Cenvat credit of CVD on imported goods — Utilisation towards payment of Service tax

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..... tion towards payment of Service tax M/s. Hindustan Construction Company Limited (HCCL) imported an aircraft last year, which was cleared on payment of appropriate Customs duty (i.e., CVD). After its import, the aircraft was being let out by HCCL on hire basis without transferring right of possession and effective control. From 16-5-2008, 'supply of tangible goods for use, without transferring r .....

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..... on of the term "exempted services" under the Cenvat Credit Rules, 2004. As per Rule 6(4), no Cenvat Credit can be taken on capital goods, which are used in providing only exempted services. Therefore, ab initio, HCCL was not eligible to take credit of CVD. Such being the case, the credit which was ab initio ineligible, does not become eligible, after the service tax is imposed on the service a .....

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