2026-VIL-1072-CESTAT-KOL-ST
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SERVICE TAX CESTAT Cases

Service Tax - CENVAT Credit on Capital Goods – Eligibility of CENVAT Credit on Tippers Received Prior to Notification dated 22.06.2010 - CENVAT Credit eligibility on tippers/capital goods received prior to statutory inclusion in the definition of capital goods - Tippers were formally included in the definition of eligible capital goods vide Notification No. 25/2010-C.E.(N.T.) dated 22.06.2010. Vehicle registration for the tippers was obtained after 22.06.2010, and the credit was utilized only from May 2011 onwards - Department denied CENVAT Credit on the ground that tippers were not eligible capital goods at the time of their receipt and accounting in books - Whether CENVAT Credit can be denied on tippers received and accounted for prior to the date when tippers were formally included in the definition of capital goods, when the said tippers were not actually used for rendering output service until after the date of such inclusion and when the credit availment was disclosed in statutory returns and examined during Departmental audit – HELD - CENVAT Credit availed on the tippers cannot be denied on the ground that the vehicles were received prior to 22.06.2010. The vehicles cannot be put to use without registration under the Motor Vehicles Act, 1988, and the registration of the tippers in question was obtained after 22.06.2010. The eligibility of CENVAT Credit on capital goods is required to be considered when the said goods are actually put to use for rendering the output service, not merely at the time of receipt. The insertion of tippers as eligible capital goods vide the notification dated 22.06.2010 is clarificatory in nature as evidenced by Board Instructions dated 23.10.2008, which recognized that vehicles supplied as tangible goods in rendering specified output services are in the nature of inputs – The CENVAT Credit on tippers and dumpers cannot be denied merely on account of procedural infractions or technical grounds when the assessee is otherwise entitled to the same and when duty has been paid on the vehicles and the same have been used in rendering the output service. Furthermore, the extended period of limitation could not be invoked as the credit availment was duly reflected in statutory ST-3 returns, the issue was examined during departmental audit conducted in 2012, and no fraud, collusion, wilful misstatement or suppression of facts with intent to evade payment of duty could be attributed to the appellant - The disallowance of CENVAT Credit and recovery thereof along with interest is set aside, and the penalty imposed under Section 78 of the Finance Act, 1994 is dropped - The appeal is allowed
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