2013 (12) TMI 1436 - AT - Service Tax

Convention service - Rent-a-cab Service used for conveyance of employees Waiver of Pre-deposit - Rent-a-cab service was partly used for transportation of food from the Hosur unit of the company to the appellant-unit - no break-up of the CENVAT credit availed on Rent-a-cab service is available on record and hence there is no way to ascertain the amount of CENVAT credit attributable to the transportation of food - the appellant was entitled to take CENVAT credit of the service tax paid on the convention service by the service provider inasmuch as the very definition of input service included coaching and training - Prima facie view in favour of the appellant in respect of convention service as also in respect of rent-a-cab service to the extent this service was used for conveyance of employees appellant directed to deposit Rupees Twenty thousand as pre-deposit upon such submission rest of the duty to be waived till the disposal Partial stay granted.

Summary

Issues:
- Waiver of pre-deposit and stay of recovery against denial of CENVAT credit for 'Rent-a-cab service' and 'Convention service' for the period from March to October 2009.

Analysis:
The appellant sought waiver of pre-deposit and stay of recovery against the denial of CENVAT credit amounting to Rs. 54,543/- for 'Rent-a-cab service' and 'Convention service' for the period from March to October 2009. The lower appellate authority had expressed ambiguity regarding the nature and purpose of the 'Rent-a-cab service', stating it did not clearly fall within the definition of 'input service' under Rule 2(l) of the CENVAT Credit Rules 2004. However, the appellant's consultant argued that the show-cause notice acknowledged the use of 'Rent-a-cab service' for conveying company employees, which was factually correct upon examination of the notice. It was also noted that part of the 'Rent-a-cab service' was used for transporting food, a fact not contested. Regarding the 'Convention service', it was revealed that some employees attended conventions for coaching and training during the material period. The consultant contended that the appellant was entitled to CENVAT credit for the service tax paid on the convention service as it fell under the definition of 'input service'.

Upon reviewing the submissions, the judge took a prima facie view in favor of the appellant concerning the 'convention service' and the 'rent-a-cab service' used for employee conveyance. However, due to the absence of a break-up of the CENVAT credit availed on the 'Rent-a-cab service', the appellant was directed to pre-deposit Rs. 20,000 within six weeks. Compliance was to be reported to the Deputy Registrar by a specified date. Subject to this compliance, waiver and stay were granted against the remaining dues. The judgment was pronounced and dictated in an open court setting.