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2017 (10) TMI 122 - AT - Central ExciseCENVAT credit - input services - Goods Transport Agency Service - Renting-a- Cab Service - Catering Service - Air And Rail Booking Service - Authorized Service Station - Held that - for rent-a-cab service, service was indeed related to manufacturing and Business Activity of the appellant - similar issue decided in the case of The Principal Commissioner Versus M/s. Essar Oil Ltd. 2015 (12) TMI 1062 - GUJARAT HIGH COURT - credit allowed. CENVAT credit - Air & Rail Travel Booking Services - Held that - the business of any company, travel of their executive and staff is necessary requirement in relation to the various activity of the company such as marketing, purchase etc, therefore travelling of the executive and staff is inevitable to run the business therefore service is related to travelling i.e. Air & Rail Travel Booking Services is necessary service for running the business hence in our view credit is admissible - credit allowed. CENVAT credit - Outdoor Catering Services - Held that - Since outdoor Catering Service is mandatorily requirement for factory it is part and parcel of the overall manufacturing activity. Accordingly, the Cenvat credit is admissible - credit allowed. CENVAT credit - Authorized Service Station - Held that - Authorized Service station services availed in respect of the vehicles used by the company for its operations. Company s factory situated outside city limits. Vehicles owned by the Company used by employees and others, hence the service is an input service - credit allowed. Except GTA in all the service credit is admissible - appeal allowed - decided partly in favor of appellant.
Issues: Admissibility of Cenvat credit on various input services including Goods Transport Agency Service, Renting-a-Cab Service, Catering Service, Air and Rail Booking Service, Authorized Service Station.
The judgment by the Appellate Tribunal CESTAT MUMBAI addressed the issue of admissibility of Cenvat credit on multiple input services. Regarding Goods Transport Agency (GTA) Service, the appellant had reversed the credit before the show cause notice was issued. The tribunal noted the debatable nature of the issue with various contrary judgments and pending cases before the Supreme Court. Consequently, the tribunal held that no malafide intention could be attributed, and hence, no penalty should be imposed. The penalty attributed to GTA Service was set aside, while the reversal of Cenvat credit along with interest was maintained. Moving on to Renting-a-Cab Service, the appellant argued that the service was related to both manufacturing and business activities. The tribunal agreed, citing precedents and held that the service was indeed related to the manufacturing and business activities of the appellant. Therefore, the demand for Cenvat credit on Renting-a-Cab Service was set aside, along with the penalty and interest. Regarding Air and Rail Booking Services, the tribunal found that these services were essential for the business operations of the company, including travel for marketing, purchase, and other departments. It was emphasized that such services were necessary for running the business, and hence, the credit was deemed admissible. Precedents were cited to support this decision, and the demand for Cenvat credit on Air and Rail Booking Services was set aside, along with the penalty and interest. For Catering Services, the tribunal noted that canteen services were mandatory under the Factories Act 1948 and were considered a welfare activity. Therefore, the tribunal held that the Cenvat credit for Outdoor Catering Services was admissible, as it was an integral part of the manufacturing activity. The appellant was supported by relevant judgments, and the demand for Cenvat credit on Catering Services was set aside, along with the penalty and interest. Lastly, for Authorized Service Station Services, the tribunal found that these services were availed for vehicles used by the company for its operations. Given that the vehicles were essential for the company's activities, the service was considered an input service, and the credit was allowed. Precedents were cited to support this decision, and the demand for Cenvat credit on Authorized Service Station Services was set aside, along with the penalty and interest. Overall, except for GTA Service, the tribunal allowed the Cenvat credit for all other services, modifying the impugned order accordingly and partly allowing the appeal. (Pronounced in court on 28/09/2017)
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