2018 (8) TMI 303 - AT - Central Excise

CENVAT Credit - input services - whether the input service credit is admissible for Mandap Keeper Service and Rent-a-cab service? - Held that - An amendment was made in the definition of input service in the year 2011 which was effective from 01.04.2011. By way of, the said amendment, Rent-a-cab service has been excluded from the definition of the input services - Since the entire demand of credit in show cause notice dt. 18.04.2012 in respect of Rent-a-cab service is for the service received by them before 01.04.2011, the credit is available to appellants. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Admissibility of Cenvat Credit on Mandap Keeper Service.
2. Admissibility of Cenvat Credit on Rent-a-Cab Service post-01.04.2011.

Detailed Analysis:

1. Admissibility of Cenvat Credit on Mandap Keeper Service:
The appellants, manufacturers of motor vehicles, were issued show cause notices for availing inadmissible Cenvat Credit on Mandap Keeper Service. The issue was whether input service credit is admissible for Mandap Keeper Service. The Tribunal referred to the judgment of the Hon’ble Punjab and Haryana High Court in the appellant’s own case, where it was held that Mandap Keeper Services used to organize meetings and events for product promotion, dealer meets, conferences, and business meetings are connected to the business of manufacture. These activities are important for promoting the sale of vehicles and are part of the business expenses on which excise duty is paid. Therefore, they are entitled to avail Cenvat credit.

2. Admissibility of Cenvat Credit on Rent-a-Cab Service post-01.04.2011:
The appellants contended that they did not avail Cenvat Credit on Rent-a-Cab service after 01.04.2011 and that the credit availed post-01.04.2011 pertained to services provided before 01.04.2011. The Tribunal noted that the adjudicating authority did not rebut this assertion. The Tribunal referred to the High Court’s judgment, which held that Rent-a-Cab services used by executives for business meetings, visits to dealerships, vendor sites, and business promotion activities are expenditures related to business. Since these expenses are included in the assessable value of the final product on which excise duty is paid, the appellants are entitled to avail Cenvat credit.

The Tribunal also noted the 2011 amendment, which excluded Rent-a-Cab service from the definition of input services effective from 01.04.2011. However, it was clarified that credit on such services is available if the provision was completed before 01.04.2011. The Tribunal found that the services in question were provided before 01.04.2011, thus entitling the appellants to avail the credit.

Conclusion:
The Tribunal concluded that the order of the adjudicating authority was not sustainable and set it aside. The appeals filed by the appellants were allowed, affirming the admissibility of Cenvat Credit on both Mandap Keeper Service and Rent-a-Cab Service for the period in question.