2012 (11) TMI 1019 - AT - Central Excise

CENVAT Credit - Whether, on rent-a-cab service and air travel agent s service, the appellant rightly availed CENVAT credit or not - Held that - It was not the case of the department in the relevant show-cause notice that rent-a-cab service was not used for transportation of employees or that air travel agent s service was not availed by the company s executives for undertaking business travels. The case of the Revenue as made out in the show-cause notice was that the two services did not qualify to be input services for the purpose of CENVAT credit. If the rent-a-cab service was used by the company for transporting their employees between the factory and their residential locations, the requisite nexus exists between the service and the manufacture of excisable goods in the factory. Similarly, if the air travels were undertaken by the company s executives for business purposes, the necessary nexus between the service and the business activities of the appellant does exist. The show-cause notice did not even attempt to make out a case to the contra. Therefore, the case of the appellant is liable to be accepted - Commissioner of Central Excise, Tirunelveli Vs. DCW 2011 (1) TMI 45 - CESTAT, CHENNAI - Decided in favour of assessee.

Summary

Issues:
1. Availing CENVAT credit on rent-a-cab service and air travel agent's service.

Analysis:
1. The appeal involved the question of whether the appellant rightly availed CENVAT credit on rent-a-cab service and air travel agent's service. The appellant claimed that the rent-a-cab service was used for transporting employees between the factory and other locations, while the air travel agent's service was utilized for business travels by the company's executives. The appellant argued that both services had a direct nexus with their business activities, making them eligible for CENVAT credit under Rule 2(l) of the CENVAT Credit Rules 2004. The appellant relied on a previous decision in Commissioner of Central Excise, Tirunelveli Vs. DCW to support their case.

2. The Superintendent (A.R.) contended that there was no evidence to support the appellant's claims regarding the use of rent-a-cab service for employee transportation or air travel agent's service for business purposes. The Superintendent also questioned the precedential value of the orders-in-original produced by the appellant, stating that they were subject to departmental review and could not be considered conclusive.

3. Upon careful consideration, the Tribunal found that the department's show-cause notice did not dispute the actual usage of the services by the appellant but rather questioned their qualification as input services for CENVAT credit. The Tribunal noted that if the rent-a-cab service was indeed used for transporting employees or if air travels were undertaken for business purposes, a clear nexus existed between the services and the appellant's business activities. The Tribunal also highlighted that the show-cause notice failed to present any contrary evidence, leading to the acceptance of the appellant's case. Additionally, the Tribunal referenced the support received from a previous decision in favor of the appellant.

4. Consequently, the Tribunal allowed the appeal in favor of the appellant, emphasizing the lack of evidence or arguments presented by the department to challenge the appellant's claims regarding the utilization of rent-a-cab service and air travel agent's service for business-related activities.