2018 (9) TMI 895 - AT - Central Excise

CENVAT credit - input service - Rent-a-Cab services for the staff/employees working in the office/factory - Held that - Tribunal in the case of Capsugel healthcare Ltd. 2016 (2) TMI 977 - CESTAT CHANDIGARH has held that Rent-a-Cab services availed by the assessee for the employees bringing them from their residence to factory or vice versa, qualifies as input services - Prior to 01.04.2011, Rent-a-Cab services are eligible input services and Cenvat credit cannot be denied on these input services. Credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Eligibility of Cenvat credit on Rent-a-Cab services availed by the appellant prior to 01.04.2011.

Analysis:
The appellant, engaged in manufacturing automobile parts, availed Cenvat credit on Rent-a-Cab services for staff during January 2011 to March 2011. The Department contended that the appellant was not eligible for this credit under Rule 14 of CCR, 2004. The adjudicating authority disallowed the credit and imposed interest and penalty. On appeal, the denial of credit was upheld but the penalty was set aside. The appellant argued that the services were eligible input services as per the pre-amended Rule 2(l) of CCR, 2004. The appellant relied on a Tribunal decision and a High Court decision supporting the eligibility of Rent-a-Cab services as input services.

The Tribunal noted the decision of the High Court holding that Rent-a-Cab services for transporting employees qualify as input services. Therefore, prior to 01.04.2011, Rent-a-Cab services were deemed eligible input services, and Cenvat credit could not be denied. Consequently, the impugned order disallowing the credit was set aside, and the appeal was allowed with any consequential reliefs.