2018 (7) TMI 678 - AT - Central Excise

CENVAT Credit - Input services - Rent-a-Cab service - Rule 2 (l) of the CCR, 2004 - Held that - The Hon ble Karnataka High Court in the case of Tata Auto Comp. Systems Ltd. 2011 (4) TMI 1397 - KARNATAKA HIGH COURT has been held that these services are eligible for availing Cenvat credit - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues: Denial of Cenvat credit on 'Rent-a-Cab' service

Analysis:
1. The case involved the appellants engaged in manufacturing excisable goods under Chapter 73 of CETA, 1985, availing Cenvat credit on inputs, capital goods, and input services for duty payment on final products. The department issued four show cause notices proposing demand of service tax credit availed for 'Rent-a-Cab' service, claiming it did not fall under the definition of input service as per Rule 2(l) of CCR, 2004. The adjudicating authority confirmed the demand, interest, and imposed penalties, which was upheld by the Commissioner (Appeals), leading to the appeals.

2. The appellant's counsel argued that 'Rent-a-Cab' service credit cannot be denied as it was excluded from input service scope from 01.04.2011, while the credit in question pertained to a period before that date. Citing precedents like CCE, Bangalore Vs. Tata Auto Comp. Systems Ltd. and M/s. Wipro Ltd. Vs. CCE, Pondicherry, the counsel contended that such services are eligible for credit. Therefore, no penalty should be imposed as the issue revolves around the interpretation of the law.

3. The Revenue, represented by the Assistant Commissioner, reiterated the lower authorities' findings, opposing the appellant's contentions.

4. After hearing both sides, the Tribunal noted the denial of Cenvat credit on 'Rent-a-Cab' service as the main issue. Relying on precedents from the Karnataka High Court and Tribunal, the Tribunal concluded that such services are indeed eligible for Cenvat credit. Referring to a previous order in a similar case, the Tribunal found the impugned orders unsustainable. Consequently, both appeals were allowed with any necessary consequential reliefs.

5. The Tribunal's decision highlighted the eligibility of 'Rent-a-Cab' service for Cenvat credit based on legal interpretations and precedents, ultimately leading to the allowance of the appeals and setting aside of the impugned orders.