Cenvat credit on capital goods against input service tax

Queries 2748 views 2 replies

Rakesh Patel

ACCOUNTANT

109 Points Joined October 2011

Supose as 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

1) he can take the credit under rule of canvat credit as input used for providing the mining service OR

2) he can take the credit of excise duty paid as capital goods used in mining service under rule of cenvat rules

Now Dumpers / Tippers is not capital goods in excise tariff 87.

Without Dumper Tippers, mining services is not possible. it is compulsory used to providing taxable service.

Now my Question is that

1) can assessee take the excise cenvat credit on oil, tyre, griss, spare part ect which used in dumper / tipper.

2) can assessee take the excise cenvat credit on diesed which used in dumper / tipper.

3) if yes Or No, why? pls give me detail of notification or rules.

Replies (2)

Mallikharjun

Deputy Manager

304 Points Joined June 2011

Pls go through the capital goods definition under CCRs. Dumpers are classified hereunder. Hope this will clarify your doubt.

"capital goods" means:-

(A) the following goods, namely:-

(i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90,¹[heading 6805, grinding wheels and the like, and parts thereof falling under heading 6804]¹ 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 (ii);

(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

(1A) outside the factory of the manufacturer of the final products for generation of electricity for captive use within the factory; or

(2) for providing output service;

(B) motor vehicle 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;

(C) dumpers or tippers, falling under Chapter 87 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), registered in the name of provider of output service for providing taxable services as specified in sub-clauses (zzza) and (zzzy) of clause (105) of section 65 of the said Finance Act;

(D) components, spares and accessories of motor vehicles, dumpers or tippers, as the case may be, used to provide taxable services as specified in sub-clauses (B) and (C);

GURU RP

GURUIYER1973@GMAIL.COM

29 Points Joined March 2012

Say , in our case, We are manuf of Liquid gases and supplying to all industry , medicals ,etc . we are using many trucks to deliver to product as final product as per CE special rule of passout sys.

In this case, we are purchasing tyres, wheel disc etc to operate the veh. so we are suppose to take credit.

Am I correct

guru