2014 (8) TMI 29 - HC - Service Tax

Cenvat Credit -input services - Rent a cab service - said rent-a-car service was rendered at various other places other than the factory - tribunal allowed the credit - Held that - Tribunal has not dealt with the questions extensively, therefore, would it be fair, just and proper at this stage itself if the present Appeal is allowed and the order of the Tribunal is quashed and set aside and the matter is remitted back to the Tribunal. - In view of the judgment of this Court in the case of Commissioner of Central Excise, Nagpur v/s Ultratech Cement Limited reported in 2010 (10) TMI 13 - BOMBAY HIGH COURT matter remitted back to the tribunal after granting full stay / waiver of pre-deposit - Decided in favor of revenue.

Summary

Issues:
1. Whether the Assessee is entitled to input service credit for rentacab services?
2. Whether the rentacab service qualifies as an input service under the Cenvat Credit Rules, 2004?
3. Applicability of a specific court judgment to the present case.

Analysis:

Issue 1:
The primary issue in this case was whether the Assessee could claim input service credit for rentacab services used for transportation from the factory to the warehouse. The Tribunal initially denied the credit for services not directly related to the business. However, the High Court, relying on a previous judgment, allowed the claim for input service credit amounting to Rs. 8,75,107. The Court confirmed a penalty of Rs. 2000 for non-payment of the credit on these services but granted the Assessee the benefit of the claimed amount during the stay application.

Issue 2:
The Court examined whether the rentacab service could be considered an input service as defined under Rule 2(1) of the Cenvat Credit Rules, 2004. The questions raised included whether the service was used for transportation between various locations, including the factory and warehouse, and whether it met the criteria for input service credit. The Court acknowledged the need for a detailed analysis on this matter, leading to the decision to remit the case back to the Tribunal for further consideration.

Issue 3:
Another significant aspect was the applicability of a specific court judgment (Commissioner of Central Excise, Nagpur v/s Ultratech Cement Limited) to the present case. The Court admitted the appeal based on substantial questions of law related to this judgment and the interpretation of the input service credit entitlement for the Assessee. The Court emphasized the importance of a thorough examination of the judgment's relevance in the context of the current dispute.

In conclusion, the High Court admitted the appeal on substantial questions of law, remitted the case back to the Tribunal for reconsideration, and granted total waiver of the predeposit condition along with an unconditional stay on recovery of duty and penalty pending the Tribunal's final decision. The Court ensured that the Tribunal would decide the matter independently, without being influenced by previous findings, and kept all contentions open for further examination.