2014 (10) TMI 516 - AT - Service Tax

CENVAT Credit - input services - Credit on Rent a cab service - Credit on GTA service - Held that - service was availed for providing cabs to the customers who are required to come and inspect the goods as regards the quality and specification before they are removed. Since this is an activity which is required to be completed before removal of goods, the appellant is eligible for the credit. As regards the freight inwards , the credit has been disallowed on the ground that the appellant have been making varied claims before the lower authority and the appellate authority. Before the lower authority, appellant stated that they received the service from M/s. Muneish Enterprises whereas before the Commissioner (A) they mentioned the name as M/s. Dinesh Enterprises. However, there is no clear finding as to whether the credit was in respect of freight inward or outwards. It is the submission of the appellant that the claim relates to only freight inwards and not for freight outwards. Learned counsel submits that total amount involved is less than ₹ 4,000/-. Having regard to the facts and circumstances, I am inclined to allow the benefit accepting the submission made by the learned counsel that the entire amount relates to transportation of raw materials, etc., into the factory and does not relate to removal of goods from the factory gate. - Decided in favour of assessee.

Summary

Issues:
1. Disallowance of credit of Service Tax on services related to maintenance of photocopier, rent-a-cab service, and freight inwards.

Analysis:
The judgment by the Appellate Tribunal CESTAT Bangalore dealt with the disallowance of credit of Service Tax on various services. Firstly, regarding the credit of Service Tax on 'photocopier maintenance,' it was noted that the issue had been previously addressed by the Hon'ble High Court of Gujarat in a specific case. The Tribunal found that since the decision of the High Court held the credit as admissible and there were no contrary decisions relied upon, the credit for photocopier maintenance was deemed admissible.

Moving on to the issue of Cenvat credit for Service Tax paid on 'rent-a-cab service,' the Tribunal considered the purpose of the service, which was providing cabs for customers to inspect goods before removal. The Tribunal agreed with the appellant's submission that this activity was necessary before goods removal, thus making the appellant eligible for the credit.

Regarding the disallowed credit for 'freight inwards,' the Tribunal observed discrepancies in the claims made by the appellant before different authorities regarding the service provider. However, the Tribunal noted that there was ambiguity regarding whether the credit was for freight inward or outward. The Tribunal, considering the total amount involved and the appellant's submission that it related only to freight inwards for transportation of raw materials, decided to allow the benefit, concluding that the amount pertained to transportation into the factory and not removal of goods from the factory gate.

In conclusion, the appeal was allowed, and any consequential relief was granted to the appellant. The judgment highlighted the importance of specific circumstances and legal precedents in determining the admissibility of Service Tax credits on different services.