2015 (10) TMI 1160 - AT - Central Excise

Denial of CENVA T Credit- Rent a cab service - Held that - In view of findings of the original authority which was upheld by the Ld. Commissioner (Appeals) there is no dispute that certain amount of service charges towards rent a cab and its service tax have been collected by the appellant from the employee, Cenvat credit to that extent is not admissible. IN view of the above discussion I agree with the lower authorities for disallowing credit of ₹ 10,332/-. In the overall facts and circumstances of the case, I waive the penalty of ₹ 2000/0 imposed by the adjudicating authority and upheld by the Ld. Commissioner (appeal). IN view of the above discussion impugned order is maintained except penalty part - Decided partly in favour of assessee.

Summary

Issues: Disallowance of Cenvat credit for 'Rent a Cab' service

Detailed Analysis:

1. The appeal was against the Order-in-Appeal disallowing Cenvat credit for 'Rent a Cab' service.

2. The appellant availed Cenvat credit for Air/Rail Travel Agent and Rent a Cab services.

3. The show cause notice proposed disallowance of the credit for 'Rent a Cab' service.

4. The adjudicating authority partly allowed the credit but disallowed an amount of Rs. 10,332 for 'Rent a Cab' service.

5. The disallowed amount was the service tax and corresponding value recovered from employees using the cab service.

6. An appeal was filed against the disallowance and penalty imposition under Rule 15(3) of CCR, 2004.

7. During the hearing, the appellant did not appear, but a letter requested the appeal to be decided on merit.

8. The Revenue representative reiterated that the disallowance was justified as the recovered amount was not admissible for credit.

9. The lower authorities agreed on the admissibility of Cenvat Credit for the 'Rent a Cab' service but disallowed the recovered amount from employees.

10. The adjudicating authority's findings supported the disallowance of Rs. 10,332 due to the recovery from employees.

11. The appellant wrongly availed credit for the recovered service tax amount, leading to a penalty under Rule 15(3) of CCR, 2004.

12. The Tribunal upheld the disallowance of Rs. 10,332 for 'Rent a Cab' service but waived the penalty of Rs. 2000 imposed by the adjudicating authority.

In conclusion, the Tribunal maintained the impugned order, partly allowing the appeal by disallowing the credit of Rs. 10,332 for the 'Rent a Cab' service due to the recovered amount from employees. The penalty was waived, and the appeal was partly allowed based on the findings of the lower authorities and the original adjudicating authority.