Service Tax Cenvat Credit

Business - Shipping - Coastal Voyage.

1)Is service tax applicable on freight charged to client.

2)CVD Paid on purchase of vessel - can this be used as Cenvat Credit.

3)Is vessel falling within the defination of Capital Asset.

Please revert back.

"capital goods" means:-

(A) the following goods, namely:- 

(i) all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading No. 68.05 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 (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

(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;

Defination of Capital Good is clear. Now the question is ;

1).CVD paid on import of vessel cenvatable.

Business - Shipping

upto 50% of CVD can be used in the FY in which it is received and balance 50% in subsequent FY.

What is the classification as per the Bill of Entry or Invoice? As per the Tariff it is in Chapter 89 which is not listed in the definition.

You may require to make a representation like mining indsutry etc who got motor vehicles added as an eligible capital goods.