2019 (5) TMI 1760 - AT - Central Excise

CENVAT Credit - input services - telephone service - insurance services - canteen services - courier services - Air travel services and - rent-a-cab services - period April, 2011 to March, 2016 - HELD THAT - In sofar as insurance and canteen services are concerned, the same are disallowable only when provided to a particular employee. Under the admitted facts, these services are provided to group of employees. The same is allowable as input service. Air Travel Service - HELD THAT - There is no allegation that such services are provided to any employee on vacation or for home travel. Under the undisputed fact that the Air Travel is received in respect to travel purposes for business, the same is held to be allowable under Rule 2 (l) of CCR. Rent-a-cab - HELD THAT - The same is allowable as input service. Appeal allowed - decided in favor of appellant.

Summary

Issues:

1. Disallowance of cenvat credit for input services including telephone service, insurance services, canteen services, courier services, air travel services, and rent-a-cab services.

Analysis:

1. Telephone Service and Courier Services: The Commissioner (Appeals) allowed cenvat credit for telephone service and courier services, considering them as part of the definition of "input service." This decision was upheld by the Tribunal.

2. Canteen Service, Air Travel Service, Insurance (Health Service), and Rent-a-Cab Service: The Commissioner disallowed cenvat credit for these services, stating they were for personal consumption of employees and fell under the Exclusion Clause of the amended definition of "input service." The Tribunal referenced previous judgments to support the denial of credit for these specific services.

3. Scope of "Input Service" and Exclusion Clause: The appellant argued that services like insurance and canteen services, provided to a group of employees, should not be disallowed under the Exclusion Clause meant for services provided to a particular employee. Previous Tribunal rulings were cited to support this argument.

4. Air Travel Service and Rent-a-Cab Service: The appellant contended that air travel services were used for business purposes and rent-a-cab services did not involve capital goods, thus should be allowed as input services. The Tribunal agreed with this argument and allowed the credit for both services.

5. Onus of Proof and Eligibility: The authorized representative for the Department referred to Rule 9(6) of Cenvat Credit Rules, placing the onus on the recipient of service to prove eligibility for input credit.

6. Final Decision: The Tribunal allowed the appeal, setting aside the disallowance of input credit for the appellant. It held that services provided to a group of employees like telephone service and air travel service for business purposes were allowable as input services. The appellant was entitled to consequential benefits as a result of this decision.