2016 (9) TMI 435 - AT - Service Tax

Cenvat credit - Rent-a-Cab service and Air Travel Agents Service - for the period post 01.04.2011, appellant have reversed the service tax credit and paid the appropriate interest - Ld. Commissioner (Appeals) has allowed the appeal for a prior period involving the services of Rent-a-Cab and Air travel Agent s Service - Held that - in view of the Tribunal ruling in the case of Goodluck Steel Tubes Ltd. Vs. Commissioner 2014 (1) TMI 37 - CESTAT NEW DELHI and the ruling of the Tribunal in the case of Innovasynth Technologies Ltd. Vs.CCE, Raigad 2015 (3) TMI 127 - CESTAT MUMBAI the eligibility for Rent-a-Cab service and Air Travel Agent s service cannot be denied. - Decided in favour of appellant

Summary

Issues:
1. Denial of Cenvat credit on Rent-a-Cab service
2. Denial of input credit of service tax on Air Travel Agents Service

Denial of Cenvat credit on Rent-a-Cab service:
The appellant's representative argued that they had reversed the service tax credit post 01.04.2011 and paid interest, citing a Board circular allowing credit on Rent-a-Cab service if provision completed before 01.04.2011. The Ld. Commissioner (Appeals) had allowed the appeal for a prior period, emphasizing the broad scope of input service under Rule 2(1) of Cenvat Credit Rules, 2004. The Commissioner stressed that denying credit on taxes borne by the manufacturer would lead to cost escalation and defeat the purpose of the Cenvat Credit Scheme. The Tribunal's decision in Goodluck Steel Tubes Ltd. case supported the availability of credit on Air Travel Agent's service. The Tribunal held that the denial of Cenvat credit on Rent-a-Cab service was unwarranted, citing the principles of the Cenvat Credit Scheme.

Denial of input credit of service tax on Air Travel Agents Service:
The Ld. Commissioner (Appeals) decision in favor of the appellant was upheld, as the Department did not contest it before higher forums. The Tribunal's rulings in Goodluck Steel Tubes Ltd. case and Innovasynth Technologies Ltd. case established that the eligibility for Rent-a-Cab service and Air Travel Agent's service could not be denied. Consequently, the impugned order denying input credit on Air Travel Agents Service was set aside, and the appeal was allowed. The Tribunal emphasized the importance of not holding a contrary view for the subsequent period for the same assessee based on the previous favorable decisions and established legal principles.

In conclusion, the judgment by the Appellate Tribunal CESTAT CHENNAI addressed the denial of Cenvat credit on Rent-a-Cab service and input credit of service tax on Air Travel Agents Service. The decision highlighted the broad scope of input service under the Cenvat Credit Rules, the aim of avoiding tax cascading, and the principles of the Cenvat Credit Scheme. The Tribunal's reliance on previous rulings and legal interpretations supported the appellant's claims, ultimately allowing the appeal and setting aside the impugned orders.