2017 (12) TMI 1820 - AT - Service Tax

CENVAT Credit - input services - Rent-A-Cab Service - Outdoor Catering Service - Hotel Charges - Maintenance Repair Vehicles service - Insurance Premiums Service for workmen - penalty - HELD THAT - The issue of admissibility of credit of service tax paid on Outdoor Catering Service, Hotel Service and Insurance Premiums for workmen are covered by the judgement of this Tribunal in the case of Ivy Competech P. Ltd., 2015 (9) TMI 1090 - CESTAT BANGALORE and Mangalore Refinery Petrochemicals Ltd., 2016 (1) TMI 481 - KARNATAKA HIGH COURT , respectively. Rent-a-Cab - Maintenance Repair of vehicles - HELD THAT - In view of the specific exclusion relating to Rent-a-Cab and Maintenance Repair of vehicles Services after 1.04.2011, the credit availed on these services is inadmissible. Penalty - HELD THAT - Since there was confusion about eligibility of credit on the Rent-a-Cab Service, after the amendment, therefore, penalty is not warranted taking credit on the services. Appeal allowed in part.

Summary

Issues involved:
- Admissibility of Cenvat credit on various services including Rent-A-Cab Service, Outdoor Catering Service, Hotel Charges, Maintenance & Repair Vehicles Service, and Insurance Premiums Service.
- Confusion regarding eligibility of credit on Rent-A-Cab Service post 01.04.2011.
- Imposition of penalty based on the confusion about credit eligibility.

Analysis:

1. Admissibility of Cenvat Credit on Various Services:
The appeal questioned the entitlement to avail Cenvat credit for service tax paid on different services. The appellant argued that previous judgments supported the admissibility of credit on these services. The advocate cited cases like Hindustan Coca Cola Beverages Ltd., Ivy Competech P. Ltd., and Mangalore Refinery Petrochemicals Ltd. to support their claim. However, the Tribunal found that while credit for Outdoor Catering Service, Hotel Service, and Insurance Premiums for workmen was permissible based on previous judgments, the credit for Rent-a-Cab and Maintenance & Repair of vehicles services after 1.04.2011 was deemed inadmissible due to specific exclusions. Consequently, the Tribunal partially allowed the appeal based on this analysis.

2. Confusion Regarding Eligibility of Credit on Rent-A-Cab Service Post 01.04.2011:
The confusion surrounding the eligibility of credit on Rent-a-Cab Service after 01.04.2011 was a significant issue in the case. The appellant argued that this confusion should exempt them from penalty due to the uncertainty in the regulations. The Tribunal acknowledged this confusion and concluded that penalty imposition for availing credit on such services was unwarranted given the circumstances. This aspect played a crucial role in the Tribunal's decision to modify the impugned order.

3. Imposition of Penalty Based on Eligibility of Credit:
The question of penalty imposition hinged on the clarity regarding the eligibility of credit on Rent-a-Cab Service post the specified date. The Tribunal, considering the confusion surrounding this issue, decided that penalty imposition was not justified in this scenario. The Tribunal's decision to not impose a penalty was influenced by the uncertainty and lack of clear guidelines regarding the eligibility of credit on Rent-a-Cab Service, post the specified amendment date. This aspect contributed significantly to the partial allowance of the appeal and the modification of the impugned order by the Tribunal.

In conclusion, the judgment by the Appellate Tribunal CESTAT Ahmedabad delved into the admissibility of Cenvat credit on various services, the confusion regarding Rent-A-Cab Service post 01.04.2011, and the imposition of penalties based on credit eligibility. The Tribunal's detailed analysis of each issue led to the partial allowance of the appeal, highlighting the importance of legal precedents, specific exclusions, and regulatory clarity in determining the admissibility of credit and penalty imposition in such cases.