BALCO wins CENVAT credit rights on bauxite mining after court verdict
Bharat Aluminium Company Limited (BALCO) has won a major tax dispute case after the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) ruled in its favour, confirming that the company is entitled to claim CENVAT credit on the service tax paid for mining services used in bauxite extraction. The tribunal’s decision, delivered on November 6, 2025, dismissed the appeal filed by the Revenue Department and upheld the earlier order of the Principal Commissioner.
How the dispute began
The case revolved around whether BALCO could rightfully claim credit for service tax paid on mining services connected to its captive bauxite mines. The company had hired a service provider to extract bauxite, the key raw material for producing alumina, which is later used to make aluminium. The Revenue Authority initially had disallowed the credit, accusing BALCO of suppressing facts and misvaluing duty payments on alumina produced by Vedanta Aluminium Limited (VAL), which handled part of the processing work.
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