9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (5) TMI 544 - AT - Central ExciseCENVAT credit - input services - transportation provided to the appellant s employees to and fro their workplace - Held that - the Tribunal in the case of Marvel Vinyls Ltd. 2016 (11) TMI 1126 - CESTAT NEW DELHI has considered the issue after the amendment in the definition of input service after 1.4.2011 and held that As such the interpretation of the lower authorities that motor vehicle are not capital goods for the services recipient cannot be appreciated in as much as motor vehicles are admittedly capital goods in terms of the Rule 2 (A) of Cenvat Credit Rules - credit is allowed. Appeal allowed - decided in favor of appellant.
Issues:
- Eligibility of CENVAT credit on services of transport for employees - Interpretation of Rule 2(l)(B) of CENVAT Credit Rules, 2004 - Capital goods status of motor vehicles - Applicability of exclusion clause in CENVAT credit rules Eligibility of CENVAT Credit on Transport Services: The appeal revolved around the eligibility of CENVAT credit on services of transport for employees. The appellant, engaged in manufacturing goods falling under Chapter 85 of CETA, 1985, had taken CENVAT credit for service tax paid to a transport corporation for employee transportation. Initially, an objection was raised by the Audit Wing officers, leading to the reversal of the amount under protest. However, the lower authority later allowed the credit, prompting the Department to appeal. The Tribunal analyzed the issue considering the definition of input service and relevant rules. Interpretation of Rule 2(l)(B) of CENVAT Credit Rules, 2004: The crux of the matter lay in the interpretation of Rule 2(l)(B) of the CENVAT Credit Rules, 2004, which excludes services provided by renting a motor vehicle not classified as capital goods from the definition of input service. The appellant argued that the exclusion is conditional and would not apply if the motor vehicle is a capital good in the hands of the service provider. The Tribunal referred to various decisions and emphasized that the exclusion clause must be examined concerning the service provider, not the recipient. It concluded that the appellant was entitled to CENVAT credit on the services in question. Capital Goods Status of Motor Vehicles: A significant aspect of the case was the determination of whether the motor vehicles used for employee transportation were capital goods. The Tribunal highlighted that for the service provider, the motor vehicle would always be considered a capital good. It clarified that the interpretation of the exclusion clause should be based on the service provider's perspective, not the recipient's. This analysis played a crucial role in establishing the eligibility for CENVAT credit. Applicability of Exclusion Clause in CENVAT Credit Rules: The Tribunal relied on precedents and the interpretation of the exclusion clause in the CENVAT Credit Rules to rule in favor of the appellant. By following the reasoning from previous decisions, the Tribunal set aside the impugned order, allowing the appeal and granting consequential relief to the appellant. The judgment emphasized the importance of correctly interpreting the rules and considering the perspective of the service provider in determining eligibility for CENVAT credit on specific services.
|
