2018 (11) TMI 822 - AT - Central Excise

CENVAT Credit - input services - rent-a-cab services - period September 2009 to March 2010 - Held that - The period involved being prior to 1.4.2011, when the definition of input service had a wide ambit as it included the words activities relating to business , appellants are eligible to avail CENVAT credit on rent-a-cab services - credit allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Denial of CENVAT credit on rent-a-cab services during September 2009 to March 2010.

Analysis:
The appellant, a manufacturer of automobile parts, filed an appeal against the Commissioner (Appeals) order upholding the denial of CENVAT credit on rent-a-cab services. The appellants had availed CENVAT credit on these services for duty payment. The original authority disallowed the credit, imposed interest, and a penalty under Rule 15 of CENVAT Credit Rules, 2004. The Commissioner (Appeals) upheld the disallowance of credit and interest but set aside the penalty.

On behalf of the appellant, it was argued that the rent-a-cab services were used for picking up and dropping off employees. Reference was made to judgments from the Hon'ble High Courts of Karnataka and Madras, along with a Tribunal decision, to support the argument.

The Assistant Commissioner supported the findings of the impugned order. After hearing both sides, it was noted that the period in question was before 1.4.2011, when the definition of input service was broader, including 'activities relating to business'. Therefore, the appellants were eligible for CENVAT credit on rent-a-cab services. The judgments cited by the appellant's counsel were found to be applicable, and the impugned order disallowing the credit was set aside. The appeal was allowed with consequential relief.