2017 (10) TMI 559 - AT - Service Tax

CENVAT credit - car rented on lease during the period April 2005 to March 2010 - It is the case of the Revenue that since the cars are put to use by the company for individual consumption, CENVAT credit is not available on such service tax paid, as it has no nexus with the manufacturing activity - Held that - The service provider has leased out the cars to the appellant for his deployment, which the appellant has done so to enable the Senior Officials of the company to travel from their residential premises to the office and vice versa - Similar issue came up before the Tribunal in the case of Steria India Ltd. 2013 (12) TMI 212 - CESTAT NEW DELHI , where it was held that since the several services in respect of which cenvatable tax was remitted by the appellant and these are input services having a proximate nexus with the software exports service provided by the appellant, the appellant is legitimately entitled to avail cenvat credit and is also entitled to refund of cenvat credit. Since the period involved in this appeal is prior to 1.4.2011, the impugned order set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against denial of CENVAT credit for service tax paid on leased cars.

Analysis:
The appellant appealed against the denial of CENVAT credit for service tax paid on cars leased during April 2005 to March 2010. The Revenue contended that since the cars were used for individual consumption by the company, CENVAT credit was not available as it lacked nexus with manufacturing activity. However, it was noted that the service tax liability on car leasing had been discharged by the appellant. The appellant leased cars to enable Senior Management Officials to travel between their residences and the office. The Tribunal referred to a similar case involving Steria India Ltd., where the appeal was allowed, emphasizing that vehicles hired for employee transportation, even for higher category employees, constituted input services eligible for CENVAT credit.

Regarding other services, the Tribunal addressed various claims for refund of service tax paid on different services like courier, civil construction, event management, public relations, and more. The Tribunal disagreed with the denial of refund for services integral to the appellant's business, such as civil works and consultancy services. It held that denial of refund for services essential to the business could not be sustained, allowing the refund for these components.

Further, the Tribunal examined the denial of CENVAT credit on input services amounting to a specific sum. It was noted that the denial was based on issues like missing PAN-based registration numbers on invoices. The Tribunal concurred with the denial of credit for invoices lacking proper details, emphasizing the importance of valid documents for availing input service credit. Additionally, the Tribunal addressed the denial of credit due to missing invoices, where the appellant argued that the invoices were submitted during the refund claim. The Tribunal allowed the credit and refund for specific services after verifying the documents but rejected the rest of the appeal.

Given the circumstances and the period of the appeal, which was before 1.4.2011, the impugned order was set aside, and the appeal was allowed. The judgment was pronounced and dictated in open court on 27/07/2017.