2015 (3) TMI 1060 - AT - Service Tax

CENVAT Credit - credit on construction service, building construction consultancy service and rent-a-cab service - Held that - Commissioner (Appeals) has categorically gave a finding that the construction service have been used by the respondent for construction of factory building only. And as per Rule 2(I) of the Cenvat Credit Rules, 2004 in the inclusive part of the definition clearly states that service used for setting up of a factory is an input service, therefore, the appellant is entitled to take Cenvat credit. Therefore, the ld. Commissioner (Appeals) has rightly allowed the Cenvat credit on construction service. Further, I find that rent-a-cab service has been used by the respondent for ferrying employees from the residence to factory and vice versa and sometimes for official purpose for which they are entitled to Cenvat credit as per the decision of Hon ble High Court of Bombay in the case of Ultratech Cement Ltd. - 2010 (10) TMI 13 - BOMBAY HIGH COURT - Decided in favour of assessee.

Summary

Issues:
1. Input service credit on construction service
2. Input service credit on building construction consultancy service
3. Input service credit on rent-a-cab service

Input service credit on construction service:
The Revenue appealed against the order allowing input service credit on construction service. The Revenue argued that Cenvat credit for construction was not available, citing a previous decision. However, the Commissioner (Appeals) found that the construction service was used for building a factory, making it eligible for credit under Rule 2(I) of the Cenvat Credit Rules, 2004. The Tribunal upheld the Commissioner's decision, stating that the appellant was entitled to take Cenvat credit for the construction service.

Input service credit on building construction consultancy service:
No specific mention of this issue is made in the judgment provided.

Input service credit on rent-a-cab service:
The Revenue contended that input service credit for rent-a-cab service was not available as it had no nexus with manufacturing activities. However, the Tribunal found that the service was used for transporting employees between their residence and the factory, as well as for official purposes. Citing a decision of the Hon'ble High Court of Bombay, the Tribunal upheld the input service credit for rent-a-cab service. The appeal by the Revenue was dismissed, and the impugned order was upheld.

In conclusion, the Tribunal upheld the decision of the Commissioner (Appeals) allowing input service credit on construction service and rent-a-cab service. The judgment provided detailed reasoning based on relevant legal provisions and precedents, ultimately dismissing the Revenue's appeal.