2018 (5) TMI 310 - AT - Service Tax

CENVAT credit - input service - rent-a-cab service - Held that - rent-a-cab service has been placed under exclusion category at clause (B) of the above definition, where there is no condition like clause(C) for personal use or otherwise, hence, credit of the service tax paid on said service not admissible after 01.04.2011. Time limitation - Held that - the demand is barred by limitation as the authorities below have not discussed nor justified with reason, the circumstances for invoking extended period of limitation, when the issue after amendment became an issue of interpretation of law. Appeal allowed on the ground of limitation.

Summary

Issues Involved:
Determining eligibility for availing cenvat credit of service tax paid on 'rent-a-cab service' during the period from 2011-2012 to 2013-2014.

Analysis:
The appeal was filed against the Order-in-appeal passed by the Commissioner of Central Excise (Appeals) regarding the eligibility of the appellant to avail cenvat credit for service tax paid on 'rent-a-cab service.' The appellant argued that the service was used for transporting staff in relation to providing output services, making them eligible for the credit even after 01.04.2011. The appellant contended that as the services were used during office hours for business purposes and not personal use, the credit should be allowed. Additionally, it was argued that the demand was time-barred as the show cause notice was issued in 2015 for the period 2011-2014, and there was no suppression of facts. The issue was stated to be a question of interpretation of law.

On the other hand, the Revenue's representative argued that post the amendment to the definition of input services, credit for rent-a-cab service was not available after 01.04.2011. The Tribunal found merit in the Revenue's argument on the basis of the amended definition of input services. The definition excluded services provided by way of renting a motor vehicle, including rent-a-cab service, if the vehicle is not a capital good. The exclusion did not have conditions like personal use, unlike other exclusions listed. Therefore, the Tribunal concluded that the credit of service tax paid on rent-a-cab service was not admissible after 01.04.2011.

However, the Tribunal acknowledged the appellant's argument regarding the limitation period. It was noted that the authorities had not justified the circumstances for invoking the extended period of limitation, especially when the issue post-amendment became a matter of interpreting the law. Consequently, the impugned Order was modified, and the appeal was allowed on the grounds of limitation.

In conclusion, the Tribunal ruled that while the appellant was not eligible for cenvat credit on service tax paid for rent-a-cab service post 01.04.2011 due to the amended definition of input services, the demand was considered time-barred due to lack of justification for invoking the extended limitation period.