2017 (3) TMI 840 - AT - Central Excise

CENVAT credit - Rent-a-cab service - Mandap Keeper/Hotel services - and Courier Service - denial on the ground that these services are not covered under the definition of Input Service as per Rule 2(l) of CCR, 2004 - Held that - Service Tax paid in relation to Rent-a-cab, Courier service, Mandap Keeper/Hotel services, are held to be input service as defined u/r 2(l) of the CCR 2004 by the Hon ble Gujrat High Court in as held in the case of M/s Essar Oil Ltd 2015 (12) TMI 1062 - GUJARAT HIGH COURT , and Tribunal in the case of M/s WNS Global Service 2016 (10) TMI 135 - CESTAT MUMBAI - However, it is not clear from the records whether the appellant has recovered the service charges from their employees in providing the said rent-a-cab service. For the limited purpose of verification of the said fact, the matter is remanded to the Adjudicating Authority - appeal allowed in part and part matter on remand.

Summary

Issues:
- Availment of Cenvat Credit on specific services
- Interpretation of "Input Service" under Cenvat Credit Rules, 2004
- Applicability of judgments in determining eligibility for Cenvat Credit
- Requirement of recovery of service charges for Rent-a-cab service

The judgment involves an appeal against an order passed by the Commissioner (Appeals) Central Excise, Customs, and Service Tax-VADODARA-I regarding the availing of Cenvat Credit on services like "Rent-a-cab, Mandap Keeper/Hotel services, and Courier." The appellant availed Cenvat Credit of ?2,84,231 on these services, which were challenged as not falling under the definition of "Input Service" as per Rule 2(l) of the Cenvat Credit Rules, 2004. The adjudicating authority confirmed the demand for recovery of the credit along with interest and penalty. The appellant appealed to the Ld Commissioner (Appeal), whose decision was also unfavorable, leading to the present appeal.

The appellant's advocate argued that the services in question had been considered as "Input Service" based on judgments from the Hon'ble Gujarat High Court and the Tribunal. Specifically, references were made to cases such as Principal Commissioner Vs Essar Oil Ltd, CCE Ahmedabad Vs Cadila Healthcare Ltd, and CST Mumbai vs WNS Global Service. It was emphasized that the appellant did not recover service charges from employees for the Rent-a-cab service, making the credit on these services admissible.

On the other hand, the Authorized Representative for the Revenue supported the findings of the Ld Commissioner (Appeals) regarding the inadmissibility of the Cenvat Credit. The Member (Judicial) noted that the Service Tax paid on Rent-a-cab, Courier service, and Mandap Keeper/Hotel services had been considered as input services under Rule 2(l) of the Cenvat Credit Rules, 2004 by the Hon'ble Gujarat High Court and the Tribunal in various cases. However, there was ambiguity regarding whether the appellant had recovered service charges from employees for the Rent-a-cab service. To clarify this crucial point, the matter was remanded to the Adjudicating Authority for verification. Consequently, the appeal was disposed of accordingly, pending the verification of the mentioned fact.