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2023 (9) TMI 65 - AT - Central ExciseCENVAT Credit - input service - Bus Transportation Charges being in the nature of Rent-a-cab service - Mainly the case of Revenue is that after the amendment in Rule 2(l) ibid w.e.f.1.4.2011 rented/contracted bus service has been expressly excluded from the definition of input service and the said service is no longer eligible for taking credit w.e.f. 1.4.2011 - HELD THAT - Taking into consideration the amended definition of Rule 2(l) ibid and in particular Rule 2(l)(B) ibid it has been held by the Hon ble High Court in SOLAR INDUSTRIES INDIA LIMITED. VERSUS THE COMMISSIONER, CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, NAGPUR 2021 (12) TMI 1047 - BOMBAY HIGH COURT that the transportation of employees for reaching factory is not an activity which could be said to be part of manufacturing activity and it is merely for personal convenience of employees to enable them to reach the premises of the factory so as to participate in the manufacturing activity which is not permitted to be treated as input service after 1.4.2011 in view of the amended provisions. Although it has been brought to my notice that for the earlier period i.e. 2012-13 the issue has been decided in favour of the appellant in an appeal filed by the appellant before some other Commissioner (Appeals), but it is not going to help the appellant in any manner in view of the aforesaid decision of the Hon ble High Court. In the matter of SOLAR INDUSTRIES INDIA LIMITED. VERSUS THE COMMISSIONER, CENTRAL EXCISE, CUSTOMS AND SERVICE TAX, NAGPUR 2021 (12) TMI 1047 - BOMBAY HIGH COURT , the facility of transportation provided by the appellant to its employees for reaching factory cannot be treated as input service in view of amended definition of Rule 2(l) and in particular Rule 2(l)(B) ibid which specifically excludes services provided by way of renting of motor vehicle, insofar as they relate to a motor vehicle which is not a capital goods, from the definition of input service and its merely a personal service to its employees. The impugned order is upheld and the appeal filed by the appellant is dismissed.
Issues involved:
The appeal challenges the rejection of cenvat credit on bus transportation charges under Rule 2(l)(B) of Cenvat Credit Rules, 2004. Issue 1 - Admissibility of cenvat credit on bus transportation charges: The appellant hired buses to transport employees from a service provider and claimed cenvat credit on the service tax paid. The Revenue contended that rented/contracted bus service is excluded from the definition of input service post the 2011 amendment in Rule 2(l). The Commissioner (Appeals) upheld the disallowance of credit. The appellant argued that various Tribunal decisions supported the admissibility of credit even after the amendment. However, the Revenue cited the Bombay High Court's decision in Solar Industries India Ltd. vs. CCE, C & ST, Nagpur, which held that transportation of employees by bus for personal convenience does not qualify as an input service post the amendment. The Tribunal concurred with this view, emphasizing that the transportation was not part of the manufacturing activity but for personal use of employees, thus not eligible for cenvat credit. Key Points: - The appellant hired buses for employee transportation and claimed cenvat credit. - Revenue argued that rented/contracted bus service is excluded from input service post 2011 amendment. - Tribunal upheld disallowance based on Solar Industries India Ltd. case, stating transportation was for personal use, not manufacturing activity.
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