2015 (1) TMI 596 - AT - Service Tax

Denial of input service credit - denial on the ground that services of empty containers sent back to the yard is not an input service as per Rule 2(l) - Held that - If any input service provider avails any service in the course of the business of output service is entitled any input service credit. In fact the transportation of empty containers to yard is an integral part of the service provided by the appellant. In these circumstances, it cannot be said that the service of transportation of empty containers to yard is not consumed by the appellant for providing output service. In these circumstances, I hold that the appellant is entitled for input service credit on transportation charges of empty containers to the yard. With these observations, the impugned orders are set aside - Decided in favour of assessee.

Summary

Issues: Denial of input service credit for transportation of empty containers to the yard.

Analysis:
The appellants challenged the impugned order denying input service credit for the transportation of empty containers to the yard, contending that it is an integral part of the service provided by them. The lower authority held that such services do not qualify as input services under Rule 2(l) of the Cenvat Credit Rules, 2004. The learned A.R. supported the impugned order by citing the decision of the Hon'ble Supreme Court in a relevant case. However, the Hon'ble High Court of Bombay's decision in another case was referenced, stating that any service availed by an input service provider in the course of their business of output service entitles them to input service credit.

The Tribunal, after considering the facts and legal precedents, concluded that the transportation of empty containers to the yard is indeed consumed by the appellant in providing output services. It was deemed an integral part of the appellant's service, contrary to the lower authority's view. Therefore, the Tribunal held that the appellants are entitled to input service credit on the transportation charges of empty containers to the yard. Consequently, the impugned orders were set aside, and the appeals were allowed with consequential relief.