2014 (3) TMI 549 - AT - Central Excise

Availment of benefit of CENVAT Credit on various input services - Management, Maintenance and Repair Service of Helicopter owned by the company - Rent-a-Cab Service - Management and Consultancy Service - Held that - Prima facie, the helicopter is shown as an asset in the balance sheet of the company, which is in good condition will suffice for its essentiality. The company would have invested in the helicopter because it is needed for their business activity and it also saves the precious time of its Managing Director, when on official tour. - stay granted. Rent-a-Cab Service, where money has been recovered from the employees, there is no reason to claim CENVAT credit on such amount. - stay granted partly. In the case of Management Consultancy, the relevant invoices have not been brought on records nor is it possible to relate it to a particular activity. Against such documents, it is seen that since the demand for the services has been made by this company, it is to be presumed that it has been for the business of this company only. There is no prima facie evidence brought in the proceedings at lower levels to show that this payment has been made in addition to any other company or in addition to any activity. - stay granted.

Summary

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

Analysis:
1. Management, Maintenance and Repair Service of Helicopter:
The Revenue contended that the expenses related to the helicopter, used by the Managing Director for multiple companies, lacked nexus with the manufacturing activity. However, the appellant argued that as per Rule 6(5) of the CENVAT Credit Rules, if even part of such services is used for manufacturing dutiable products, credit for the entire service tax paid should be allowed. The Tribunal found the helicopter essential for the business, considering it an asset in the balance sheet and crucial for the Managing Director's official tours, thus allowing the credit.

2. Rent-a-Cab Service:
The Revenue argued that this service, exclusively used to transport officers and executives, did not relate to manufacturing activity, especially since part of the cost was recovered from employees. The appellant contended that since only a portion of the service cost was recovered, the entire service tax paid should be eligible for credit. The Tribunal directed the appellant to pre-deposit a nominal amount, indicating no credit for the recovered portion.

3. Management Consultancy Service:
Regarding consultancy services, the Revenue questioned the lack of evidence showing exclusive use for the company's business activities. The appellant clarified that the consultancy was related to financial management and policy decisions, with no service provided to other companies. The Tribunal noted the absence of invoices but presumed the services were for the appellant's business, not directing any pre-deposit due to insufficient evidence of external use.

In conclusion, the Tribunal allowed CENVAT credit for the Management, Maintenance and Repair Service of the Helicopter, directed a pre-deposit for the Rent-a-Cab Service due to cost recovery from employees, and did not require a pre-deposit for the Management Consultancy Service, presuming it was solely for the appellant's business.