17 December 2008
Suppose an assessee who is mining service provider and purchase Dumpers/Tippers for providing the mining service. Assessee wants to take the CENVAT CREDIT. He has two option (a) He can take the credit of Excise Duty paid as capital goods used in mining service under rule 2(a)A of CENVAT Credit Rules or
(b) He can take the Credit under rule 2k(ii) of CENVAT credit as INPUT used for providing the mining service.
Now Dumpers/Tippers is not a capital goods u/r 2(a)A, as it falls in Excise Tariff 87.
Now my Question is that can assessee take the cenvat credit as Input described u/r 2k(ii) instead of Capital Goods. Because without Dumpers/Tippers, mining service is not possible. It is compulsorily used to provide taxable Service. Rule 2k (ii) also describes that all goods except petrol used for providing any output service. Goods can be capital or other goods.
If any goods disqualified as Capital Goods for CENVAT Credit, can it also be disqualified to take CENVAT credit as INPUT
19 December 2008
As per my view, the Dumpers/Tippers if they are not included in the definition of capital goods, then they can be classified as inputs used in the course of providing taxable service. So analysing the definitions of capital goods and inputs, the CENVAT Credit on such inputs should not be disqualified. In other words he is eligible to avail the CENVAT Credit.
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