2019 (1) TMI 1642 - AT - Central Excise

CENVAT credit - input services or Capital Goods? - Rent-a-Cab Service - it was submitted that Rent-a-Cab Services were used for pick-up and drop‟ facility of the employees - HELD THAT - The definition of capital goods in Cenvat Credit Rules provides that vehicles have to be capital goods for the service provider, who is providing the service of transportation to passengers - Clause B of definition of input services‟ provide that the said credit is eligible only if the vehicles are capital goods for the service provider. On the basis of the law, authorities below have correctly analyzed the issue and disallowed the credit - appeal dismissed - decided against appellant.

Summary

Issues involved: Disallowance of credit on Rent-a-Cab Service under Cenvat Credit Rules, 2004.

Analysis:

The appeal centered around the disallowance of credit on Rent-a-Cab Service. The appellant argued that the services were used for the 'pick-up and drop' facility of employees, serving both manufacturing activities and providing Output Service, thus justifying the credit. On the other hand, the learned Authorised Representative contended that the vehicles must qualify as capital goods for the service provider to be eligible for credit, referencing the relevant clauses in the Cenvat Credit Rules, 2004.

Upon hearing both sides, it was noted that the definition of 'capital goods' in the Cenvat Credit Rules stipulates that vehicles must be considered capital goods for the service provider offering transportation services to passengers. Similarly, clause B of the definition of 'input services' specifies that credit is only permissible if the vehicles are classified as capital goods for the service provider. Consequently, the authorities below were deemed to have correctly applied the law in disallowing the credit. The judgment concluded that the impugned order did not warrant any intervention, leading to the dismissal of the appeal.