2018 (5) TMI 773 - AT - Central Excise

CENVAT credit - rent-a-cab services - extended period of limitation - Held that - in the case of Marvel Vinyls Ltd. Vs. CCE Indore 2016 (11) TMI 1126 - CESTAT NEW DELHI it was held that the exclusion clause is in respect of input services of renting of the motor vehicle which is not a capital good and does not include the renting of cab services entirely. Inasmuch as for recipient of the rent-a-cab service the question of capital goods will not arise the exclusion will not apply. On going through the Tribunal s decision in the case of Marvel Vinyls Ltd. I note that the same was also in the context of recipient of the services. As such the said decision is at all four corners of the facts of the present case and is fully applicable. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Availing Cenvat credit on rent-a-cab services.
2. Applicability of exclusion clause on input services.
3. Interpretation of Tribunal's decision in Marvel Vinyls Ltd. case.
4. Context of provider vs. recipient of rent-a-cab services.

The judgment revolves around the issue of availing Cenvat credit on rent-a-cab services. The Revenue filed an appeal against the order passed by the Commissioner (Appeals) proposing to deny the credit availed by the respondent during a specific period. The contention was based on the exclusion of said services effective from a certain date. The Commissioner (Appeals) set aside the demands following the Tribunal's decision in the Marvel Vinyls Ltd. case, which clarified that the exclusion clause pertains to input services of renting motor vehicles, not including renting cab services entirely as they are not capital goods. Hence, for the recipient of rent-a-cab service, the exclusion does not apply.

The key issue addressed was the applicability of the exclusion clause on input services, specifically rent-a-cab services. The Tribunal's decision in the Marvel Vinyls Ltd. case was crucial in interpreting the scope of the exclusion. It was clarified that the exclusion pertains to input services of renting motor vehicles that are not capital goods, distinguishing them from renting cab services. The judgment emphasized that for the recipient of rent-a-cab services, the question of capital goods does not arise, thus the exclusion does not apply to such services.

A significant aspect of the case was the interpretation of the Tribunal's decision in the Marvel Vinyls Ltd. case. The judgment highlighted that the decision was made in the context of the recipient of services, not just the provider. It was crucial to establish that the decision applied to all aspects of the present case, emphasizing that the exclusion clause did not extend to rent-a-cab services for the recipient. This interpretation played a pivotal role in rejecting the Revenue's appeal.

The judgment also delved into the distinction between the context of the provider and the recipient of rent-a-cab services. The Revenue contested that the Tribunal's decision in the Marvel Vinyls Ltd. case was specific to the provider, seeking to differentiate its applicability to the recipient. However, the judgment refuted this contention, noting that the decision encompassed both contexts. By establishing that the decision applied to the recipient of services as well, the appeal of the Revenue was ultimately rejected.

In conclusion, the judgment clarified the applicability of the exclusion clause on input services, particularly rent-a-cab services, emphasizing the interpretation of the Tribunal's decision in the Marvel Vinyls Ltd. case. The distinction between provider and recipient contexts was crucial in determining the outcome of the appeal, ultimately leading to the rejection of the Revenue's appeal.