2018 (9) TMI 1118 - AT - Central Excise

CENVAT Credit - input services - rent-a-cab services for the period April 2011 to May 2011 - Held that - For the period for which the services have been consumed is shown as prior to 1.4.2011. However, this fact has to be verified for which, it is fit to remand the matter to the adjudicating authority, who shall consider the issue whether the services have been availed by the appellant prior to 1.4.2011 and also consider the applicability of the decision relied by the ld. counsel for appellant - appeal allowed by way of remand.

Summary

Issues:
1. Eligibility of CENVAT credit on rent-a-cab services consumed before 1.4.2011.

Analysis:
The case involved the appellant, engaged in manufacturing excisable goods, availing CENVAT credit on various input services, including rent-a-cab services for picking up and dropping employees. A show cause notice was issued for disallowing the credit on rent-a-cab services for the period April 2011 to May 2011. The Commissioner (Appeals) upheld the demand, interest, and penalty, leading to the appeal before the Tribunal.

The appellant's counsel argued that the rent-a-cab services were consumed before 1.4.2011, even though payments were received after that date. Citing the Board's Master Circular and precedents, the counsel contended that if services were availed before 1.4.2011, the credit availed later is eligible. The invoices supported the claim that services were consumed prior to the specified date.

On the other hand, the respondent's representative supported the findings of the impugned order, stating that verification was needed to confirm the consumption date of services. The Tribunal considered the arguments and evidence presented. It noted the Board's circular, emphasizing that if services were availed before 1.4.2011, the credit post that date is permissible. Referring to a relevant case law, the Tribunal found merit in the appellant's claim but deemed it necessary to verify the consumption date of services.

Consequently, the Tribunal set aside the impugned order and remanded the case to the adjudicating authority for verifying whether the services were indeed consumed by the appellant before 1.4.2011. The authority was directed to consider the applicability of the cited decision and the binding nature of the Board's circular. The appeal was allowed for further examination by the adjudicating authority.