2017 (7) TMI 1162 - AT - Central Excise

CENVAT Credit - input services - Rent a Cab service - Aviation Service - denial on the ground that after the amendment to the definition of Rule 2(l) of Cenvat Credit Rules 2004 under exclusion clause such services cannot be held to be cenvatable input services - Held that - The issue of availability of credit in respect of rent a cab service was subject matter of the Tribunal in the case of M/s. Marvel Vinyls Ltd. Vs. CCE Indore 2016 (11) TMI 1126 - CESTAT NEW DELHI and it was held that the same would be available to the assessee using such services in the course of their business - credit allowed. Aviation Service - The payments of the said services have been made by the Company and these facts leads to inevitable conclusion that the chartered flights were hired for the movement of the employees etc. and not for individual persons - credit allowed. Appeal allowed - decided in favor of appellant.

Summary

Issues: Availability of Cenvat credit on Rent a Cab service and Aviation Service for manufacturing Aluminum Die castings.

Analysis:
1. Issue of Cenvat Credit on Rent a Cab Service:
The appellants, engaged in manufacturing Aluminum Die castings, claimed Cenvat credit on Rent a Cab service and Aviation Service utilized in their business. The Revenue denied the credit post an amendment to the definition of Rule 2(l) of Cenvat Credit Rules, 2004. However, the Tribunal in the case of M/s. Marvel Vinyls Ltd. Vs. CCE, Indore had held that such credit would be available to the assessee using such services in the course of their business. No contradictory decision was presented by the Revenue. The appellants had taken a clear stand that they hired chartered flights for business purposes, and this was not refuted by the authorities. The payments for these services were made by the Company, indicating that the chartered flights were used for business-related activities and not for personal use. Consequently, the Tribunal set aside the impugned orders and allowed the appeals, granting relief to the appellants.

2. Issue of Cenvat Credit on Aviation Service:
Regarding the Aviation Services, the Tribunal decision in the case of Force Motors Ltd. Vs. CCE, Pune was cited. The Revenue contended that the appellants failed to prove that Rent a Cab services and Aviation services were used for business purposes. However, the Tribunal found no merit in this argument as the appellants had clearly stated that chartered flights were hired for business exigencies, such as senior management meetings and other business visits. The authorities did not challenge this contention, and the payments for these services were made by the Company. This led to the conclusion that the services were indeed used for business-related activities. As a result, the Tribunal allowed all three appeals, providing consequential relief to the appellants.

In conclusion, the Tribunal's judgment favored the appellants, allowing them to avail Cenvat credit on Rent a Cab service and Aviation Service for their business activities related to manufacturing Aluminum Die castings.