2013 (7) TMI 340 - AT - Central Excise

Stay Application Waiver of Pre-deposit - Cenvat Credit on Services received Services used in the manufacturing activity of the applicants - Rent-a-Cab Service was recovered from the employees - Management Consultancy Service was providing consultancy to the company regarding financial management, taking policy decisions of the company Held that - Rent-a-Cab Service - Money has been recovered from the employees - Prima facie there is no reason to claim CENVAT credit on such amount Directed appellant to pre-deposit Rs.10,000/- (Rupees Ten Thousand only) on this count - Management Consultancy Services - No prima facie evidence to show that the payment was services rendered to some other company No Pre-deposit on this count - Subject to such pre-deposit, predeposit of balance dues is waived for admission of appeal and its collection is stayed during pendency of appeal.

Summary

Issues:
1. Disputed CENVAT credit on input services: Management, Maintenance and Repair Service of Helicopter, Rent-a-Cab Service, and Management Consultancy Service.

Analysis:
1. The appellant, a manufacturer of excisable goods, availed CENVAT Credit Scheme for input services including Management, Maintenance and Repair Service of Helicopter, Rent-a-Cab Service, and Management Consultancy Service.
2. The Revenue contended that the services were not used in relation to the manufacturing activity, citing the Managing Director's association with multiple companies as a reason to question the nexus with the manufacturing activity.
3. Regarding Rent-a-Cab Service, it was argued that transporting officers and executives from residences to the factory did not directly relate to manufacturing activity, especially since part of the cost was recovered from employees.
4. Concerning Management Consultancy Service, the Revenue questioned the purpose and timing of the consultancy services provided to the company.
5. The appellant's counsel highlighted that certain services were specified under Rule 6(5) of the CENVAT Credit Rules, emphasizing that even if part of the service was used for manufacturing dutiable products, credit for the entire service tax paid should be allowed.
6. The appellant's counsel also defended the Rent-a-Cab Service by pointing out that only a portion of the service cost was recovered from employees, suggesting that disallowing credit for the entire service tax was unwarranted.
7. In the case of Management Consultancy Service, it was argued that the consultancy provided was essential for financial management and policy decisions of the company, with no evidence of services being rendered to other companies.
8. The Revenue countered by stating that evidence was lacking to prove exclusive use of the helicopter for business purposes and the nature of consultancy services provided was not adequately demonstrated.
9. After considering arguments from both sides, it was observed that the helicopter was a business asset, essential for the appellant's operations, justifying the CENVAT credit.
10. However, for the Rent-a-Cab Service where money was recovered from employees, a directive was issued for the appellant to pre-deposit a specified amount.
11. Regarding Management Consultancy Service, since relevant invoices were not produced, and no evidence indicated services rendered to other companies, no pre-deposit was deemed necessary.
12. The appellant was directed to make a pre-deposit within a specified period, with the balance dues waived for appeal admission, subject to compliance.

This comprehensive analysis covers the disputed CENVAT credit on various input services and the arguments presented by both the appellant and the Revenue, leading to the Tribunal's decision on pre-deposit requirements and waiver of balance dues for appeal admission.