2014 (7) TMI 894 - AT - Service Tax

Cenvat credit - Rent-a-cab service - Revenue contends that rented cabs were not exclusively used for the purpose of providing output service - Held that - Commissioner has given a categorical finding that the cabs in respect of which credit has been taken were used for providing output service which would clearly make the impugned credit admissible. In the grounds of appeal submitted by the Department they have merely stated that the impugned cabs were not exclusively used for the purpose of maintenance etc. but have not given any evidence to that effect. The Commissioner (Appeals) also observed that Revenue had not given any evidence contrary to the submissions of the appellants - no infirmity in the impugned order - Decided against Revenue.

Summary

Issues:
- Department's appeal against allowing cenvat credit on rent-a-cab service
- Whether rented cabs were exclusively used for providing output service

Analysis:
The Department appealed against the appellate authority's decision allowing cenvat credit on service tax paid for rent-a-cab service during a specific period. The Department argued that a similar issue was pending before the Division Bench of the Tribunal but the appellant contended that the issues might not be identical. The crux of the Revenue's appeal was that the rented cabs were not exclusively used for providing output service.

Upon reviewing the case, the Tribunal noted that the appellant had submitted that the vehicles hired were used for maintenance, installation, repair, and technical inspection related to providing output services like Telecommunication service. The Tribunal emphasized that for rent-a-cab services to be excluded from input services, it must be proven that they were used for purposes other than company business. The Tribunal found the appellant's submissions consistent and noted the absence of contrary evidence from the Department.

The Commissioner had categorically found that the cabs were indeed used for providing output services, rendering the credit admissible. The Department's grounds of appeal lacked supporting evidence to refute this. Additionally, the Tribunal highlighted the absence of evidence from the Revenue to challenge the findings of the impugned order. The Tribunal referenced a judgment emphasizing the liberal interpretation of the definition of input service.

Ultimately, the Tribunal found no factual inaccuracies in the impugned order and rejected the Revenue's appeal, concluding that the cabs were used for providing output services, making the credit valid. The Department failed to produce evidence to support their grounds for appeal, leading to the dismissal of the appeal.