2012 (10) TMI 220 - AT - Service Tax

Admissibility of Cenvat Credit- Input Service - Held that - Service tax paid on transportation services provided to the staff for pickup and drop from their residence to the factory and hiring ambulance for taking injured employees for treatment is an Input Service - Cenvat Credit can be taken as these activities are relating to Business of assessee,as decided in case of CCE v. Stanzen Toyotetsu India (P.) Ltd. 2011 - TMI - 204471 - KARNATAKA HIGH COURT - Further hiring of buses for children of the employees for transportation to the schools and tuition is not an Input Service and Cenvat Credit cannot be taken on this activity. - Stay granted partly.

Summary

Issues: Eligibility for Cenvat credit of Service tax paid on hiring buses for transportation of employees, hiring ambulance for injured employees, and hiring buses for employees' children's transportation to schools and tuition centers.

Analysis:
The appellant filed an appeal against the Commissioner's order disallowing Cenvat credit for services related to transportation of employees, injured employees, and employees' children. The disputed amount of Cenvat credit was primarily for transportation of employees and hiring of an ambulance. The appellant's counsel argued that several High Court judgments supported their eligibility for Cenvat credit in similar cases. The Tribunal had also issued a stay order in favor of the appellant regarding transportation of employees and ambulance services but did not agree on transportation charges for children to schools or tuition centers. The Departmental Representative opposed the stay application, standing by the Commissioner's findings.

The Tribunal reviewed the submissions and records and found that the issue of admissibility of Cenvat credit for hiring buses for employee transportation and ambulance services was settled by previous High Court judgments and the Tribunal's stay order. The appellant was directed to deposit Rs.62,500 within four weeks. Upon depositing this amount, the pre-deposit requirement for the remaining Cenvat credit demand, interest, and penalty would be waived, and recovery stayed pending the appeal's disposal. The case was listed for compliance and final disposal on June 22, 2012.