Case Details: Gajraj Mining Pvt. Ltd. Versus Commissioner of Central Goods and Service Tax, Customs and Excise, Jabalpur
Judiciary and Counsel Details
- Dr. Rachna Gupta, Member (J) & Ms Hemambika R. Priya, Member (T)
- Ms Nikit Jaju, Adv. for the Appellant.
- Shri Harshvardhan, Authorized Representative for the Respondent.
Facts of the Case
The assessee, engaged in providing taxable services, availed CENVAT credit on dumpers/tippers received under an operating lease arrangement. The vehicles, however, were registered in the name of the leasing company and not in the name of the assessee. The Department disputed the credit eligibility, contending that under Rule 2(a)(C) of the CENVAT Credit Rules, 2004, as amended by a Notification No. 25/2010-CE (NT), dated 22-6-2010, such credit was permissible only if the vehicles were registered in the name of the output service provider. Invoking the extended period of limitation, the Department demanded the reversal of CENVAT credit along with interest and imposed a penalty. The assessee contended that Rule 4(3) of the CENVAT Credit Rules, 2004 allowed credit on leased capital goods, making ownership irrelevant. The dispute was adjudicated before the High Court.
High Court Held
The Hon’ble High Court held that CENVAT credit on dumpers/tippers is available only if the vehicles are registered in the name of the service provider, as mandated by Rule 2(a)(C) of the CENVAT Credit Rules, 2004, introduced via Notification No. 25/2010-CE (NT), dated 22-6-2010. As the statutory condition was not fulfilled, the credit was rightly denied. However, given that the assessee availed the credit under a bona fide belief based on prior legal interpretations and in the absence of any intent to evade duty, the extended period of limitation was not applicable, and the penalty was set aside. The demand for CENVAT credit with interest for the normal period was upheld.
List of Cases Cited
- Belani Ores Ltd. v. State of Orissa — AIR 1975 SC 17 — Referred [Para 10]
- Bharat Hotels Limited v. Commissioner — 2018 (12) G.S.T.L. 368 (Del.) — Referred [Para 3.6]
- Commissioner v. Brahmaputra Infrastructure Ltd. — Final Order No. 52459/2018, dated 6-7-2018 by CESTAT — Relied on [Para 8]
- Commissioner v. Dilip Kumar and Company — 2018 (361) E.L.T. 577 (S.C.) — Relied on [Para 10]
- Commissioner v. Hindustan Copper Ltd. — 2016 (342) E.L.T. 282 (Tribunal) — Referred [Paras 3.1, 5, 8]
- Commissioner v. Ilgin Automotive Pvt. Ltd. — 2014 (299) E.L.T. 129 (Mad.) — Referred [Paras 3.1, 5]
- Commissioner v. Pepsi Foods Ltd. — 2010 (254) E.L.T. 284 (P & H) — Referred [Paras 3.1, 5]
- Gaurav Contract Co. v. Commissioner — Final Order No. A/11276/2020 — Referred [Parass 3.1, 3.2, 5]
- His Automotives Ltd. v. Commissioner — 2004 (163) E.L.T. 116 (Tribunal) — Referred [Paras 3.1, 5]
- JSW Steel Ltd. v. Commissioner — 2014 (307) E.L.T. 929 (Tribunal) — Referred [Paras 3.1, 5]
- Madras Cements Ltd. v. Commissioner — 2010 (257) E.L.T. 321 (S.C.) — Referred [Paras 3.1, 5]
- Mount Everest Breweries Ltd. v. Commissioner — Final Order No. 50802/2023 — Referred [Paras 3.6, 5]
- Phushpam Pharmaceutical Company v. Collector — 1995 (3) SCC 462 — Referred [Paras 3.6, 5]
- Pratibha Processors v. Union of India — 1996 (88) E.L.T. 12 (S.C.) — Relied on [Para 11]
- Sharda Motors Industries Ltd. v. Commissioner — 2002 (150) E.L.T. 759 (Tribunal) — Referred [Paras 3.1, 5]
- Vikram Cement v. Commissioner — 2006 (197) E.L.T. 145 (S.C.) — Referred [Paras 3.1, 5]
List of Notifications Cited
- Notification No. 25/2010-C.E. (N.T.), dated 22-6-2010 [Paras 3.1, 5, 9]
- Notification No. 3/2011-C.E. (N.T.), dated 1-3-2011 [Para 11]
- Notification No. 28/2012, dated 20-6-2012 [Para 3.1]
