2011 (12) TMI 136 - AT - Service Tax

CENVAT Credit of Service Tax on rent-a-cab service - rent-a-cab service was not exclusively used in relation to manufacture period involved April 2005 to October 2009 - Held that - The issue is only of interpretation of law. However, the relevant decisions regarding limitation as well as admissibility of credit or otherwise, were not cited before lower authority and therefore, the matter is remanded to original adjudicating authority, who shall consider the issue afresh in the light of the decisions of the Supreme Court/High Court/Tribunal and also the provisions of law.

Summary

Issues:
1. Denial of CENVAT Credit on Service Tax paid for rent-a-cab service.
2. Appeal for waiver of pre-deposit and fresh consideration due to lack of proper submission on limitation.
3. Interpretation of law regarding admissibility of CENVAT Credit on rent-a-cab service used for family members and children.

Analysis:
1. The appellants, engaged in manufacturing various products, availed CENVAT Credit of Service Tax paid on rent-a-cab service. However, the credit was denied for the period from April 2005 to October 2009 as the service was not exclusively used in relation to manufacturing activities. This denial led to a demand for the availed credit with interest and imposition of a penalty amounting to Rs.4,16,022. The issue revolved around the exclusive use of the rent-a-cab service in connection with manufacturing activities.

2. Upon hearing both sides, it was observed that the appellants focused their defense on merits without properly addressing the alternative submission on limitation. The tribunal noted that several relevant decisions on limitation and CENVAT Credit were rendered post the lower authority's decision or were not presented before them. Consequently, the tribunal decided to remand the matter for fresh consideration, waiving the pre-deposit requirement and taking up the appeal for final decision. This highlighted the importance of presenting all relevant legal precedents and arguments before the adjudicating authority.

3. The issue of interpretation of law arose concerning the admissibility of CENVAT Credit on rent-a-cab service used for transporting family members and children, including for school purposes. The appellant argued that recent decisions, such as the case of Ultratech Cement, supported the admissibility of such services as input services. The tribunal acknowledged the interpretation conflict and the absence of citing relevant decisions before the lower authority. Consequently, the matter was remanded to the original adjudicating authority for a fresh review in light of applicable legal decisions and provisions, emphasizing the appellant's right to present their case adequately.

In conclusion, the judgment addressed the denial of CENVAT Credit on rent-a-cab service, the procedural aspects of the appeal, and the interpretation of law regarding the admissibility of such services for credit purposes. The importance of presenting all relevant legal arguments and precedents before the adjudicating authority was underscored, ensuring a fair and thorough consideration of the case.