2019 (1) TMI 1239 - AT - Service Tax

CENVAT Credit - input services - hiring of vehicles and rent-a-cab services - Held that - The issue has been considered by the Hon ble Tribunal in the case of Marvel Vinyls Ltd. Vs. CCE, Indore 2016 (11) TMI 1126 - CESTAT NEW DELHI wherein the Tribunal held that the cenvat credit on car rental is available as input service credit for the service receiver if the cars are capital goods for the car rental service provider - the impugned order denying the cenvat credit on rent-a-cab service is not sustainable in law. Demand of interest of ₹ 77,256/- - Held that - The same is confirmed as fairly conceded by the counsel for the appellant. Appeal allowed in part.

Summary

Issues:
1. Admissibility of cenvat credit on hiring of vehicles and rent-a-cab.
2. Liability of interest on delayed payment of service tax.

Analysis:

Issue 1: Admissibility of cenvat credit on hiring of vehicles and rent-a-cab:
The appellant, engaged in various services, availed cenvat credit on hiring vehicles and rent-a-cab, leading to a demand of wrongly availed credit and interest. The Commissioner (Appeals) upheld the demand, stating that the vehicles were not capital goods for the appellant. However, the appellant argued that as per the Cenvat Credit Rules, vehicles were capital goods for the service provider, entitling them to input service credit. The appellant cited the case of Marvel Vinyls Ltd., where the Tribunal allowed cenvat credit on car rentals if the vehicles were capital goods for the service provider. The appellant also presented registration certificates to prove the vehicles were registered in the service provider's name. The Tribunal, after considering the arguments and precedents, held that the appellant was entitled to cenvat credit on the services. The impugned order denying the credit was set aside, and the appeal was allowed.

Issue 2: Liability of interest on delayed payment of service tax:
The appellant did not contest the demand for interest on delayed payment of service tax. The Counsel for the appellant conceded to the interest amount, which was confirmed. The Tribunal, considering the submissions and records, confirmed the interest amount of &8377; 77,256/- as conceded by the appellant. The appeal was disposed of accordingly, with the impugned order on interest sustained.

In conclusion, the Tribunal allowed the appeal regarding the admissibility of cenvat credit on hiring vehicles and rent-a-cab, setting aside the impugned order. However, the demand for interest on delayed payment of service tax was confirmed as per the concession made by the appellant. The judgment provided a detailed analysis of the legal provisions, precedents, and arguments presented by both parties, resulting in a comprehensive decision on the issues raised in the appeal.