2013 (9) TMI 552 - AT - Service Tax

Cenvat Credit on Rent a Cab Operator Services - Respondent a manufacturer had been using the services of rent-a-cab operators for enabling their officers to visit their vendors and the purchasers as also for other business activities - For service tax paid by rent-a-cab operators, they had taken credit - Not verified any documents whether each of their trips of the officers of the Respondent company were actually in relation to manufacture Held that - Appeal is not supported by any evidence to disprove the claim of the assesse As per the decision in the case of Hon ble Kartanaka High Court in CCE Vs Stanzen Toyotetsu India (P) Ltd. 2011 (4) TMI 201 - KARNATAKA HIGH COURT , raising supporting evidence with the appeal is necessary Decided against the Revenue.

Summary

Issues involved:
CENVAT credit on service tax paid for rent-a-cab services.

Analysis:

1. The appeals revolve around the issue of CENVAT credit claimed for service tax paid on rent-a-cab services used by the respondent, a manufacturer, for various business activities. The Commissioner allowed the credit, leading to the Revenue filing an appeal disputing the decision.

2. The Revenue did not contest the legal eligibility of claiming CENVAT credit on rent-a-cab services related to manufacturing activities. However, they argued that the Commissioner did not verify if each trip taken by the officers was genuinely linked to manufacturing activities, citing a previous case to emphasize the importance of establishing a nexus between the service and manufacturing.

3. The respondent's counsel countered the appeal by asserting that the expenses incurred for the rent-a-cab services were essential for their business operations, indicating a clear connection to business activities. They highlighted that the show cause notice did not dispute the purpose of the services used, focusing instead on the legal aspect of considering tour operator services as input services for CENVAT credit.

4. Upon reviewing the submissions and records, the judge noted that the respondent had specifically mentioned that the services were utilized for visiting customers and vendors. The judge criticized the Revenue for not verifying this crucial aspect and solely relying on assumptions. The judge also referenced a precedent from the Karnataka High Court, establishing the eligibility of CENVAT credit for rent-a-cab services related to manufacturing, emphasizing the lack of contradictory evidence presented by the Revenue.

5. Ultimately, the judge upheld the impugned order, rejecting the Revenue's appeal and disposing of the respondent's cross-objections. The decision was made based on the established legal position and the absence of evidence challenging the respondent's claim for CENVAT credit on rent-a-cab services.