2024 (11) TMI 127 - AT - Service Tax

Recovery of the Cenvat Credit wrongly availed and utilized by the appellant - input service for the period prior to 01.04.2011 and from April 2011 to March 2012 - Renting of immovable property service - Management, maintenance or repair service - Transportation of goods by road service - Event management service - Commercial or industrial construction service - Rent-a-cab operator s service. Renting of immovable property service - Management, maintenance or repair service - Transportation of goods by road service - Event management service - Commercial or industrial construction service - HELD THAT - It is a well settled principle in the case of M/S. COCA COLA INDIA PVT. LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE, PUNE-III 2009 (8) TMI 50 - BOMBAY HIGH COURT wherein it has been held by the Hon ble Bombay High Court that in the event an assessee satisfies any one of the limbs of the definition of the term input service , the credit of the input service would be available. Further, it is found that the input services namely Renting of immovable property service , Management, maintenance or repair service , Transportation of goods by road service , Event management service and Commercial or industrial construction service has been held to be input service in the various case laws relied upon by the appellant. Therefore, as these services fall within the definition of input service and the Cenvat Credit has been wrongly denied to the appellant. Rent-a-cab operator s service - HELD THAT - It is found that the said service has been put in the category of negative list w.e.f. 01.04.2011 and the Cenvat Credit is not available on the said service. Further, the appellant has failed to prove as to what purpose the Rent-a-cab operator s service was availed and also has not submitted the documentary evidence to establish and substantiate their claim. Therefore, in respect of Rent-a-cab operator s service , the appellant is not entitled to Cenvat Credit on the same. Appeal allowed in part.

Summary

Issues Involved:

1. Admissibility of Cenvat Credit on various input services under Rule 2(l) of the Cenvat Credit Rules, 2004.
2. Denial of Cenvat Credit on Rent-a-cab operator's service due to its inclusion in the negative list from 01.04.2011.

Detailed Analysis:

1. Admissibility of Cenvat Credit on Various Input Services:

The primary issue in this case revolves around the admissibility of Cenvat Credit on input services used in relation to the manufacture and sale of excisable goods. The appellant had availed Cenvat Credit on several input services, including Renting of immovable property services, Management, maintenance or repair services, Transportation of goods by road, Event Management Service, and Commercial or Industrial Construction service. The department contended that these services did not qualify as input services as per Rule 2(l) of the CCR, 2004, and thus, issued a show cause notice to recover the credit.

The appellant argued that these services were integral to their business operations and fell within the definition of input services. They cited several judicial precedents where similar services were considered as input services, thereby entitling them to Cenvat Credit. The tribunal examined the definitions of "input service" before and after April 2011 and referred to the principle established in the Coca Cola Private Limited case, which allowed credit if any one limb of the definition was satisfied.

Upon reviewing the case laws and the appellant's submissions, the tribunal concluded that the services in question were indeed input services. Consequently, the tribunal allowed the Cenvat Credit for these services, as they were directly or indirectly related to the manufacturing activity and the clearance of final products up to the place of removal.

2. Denial of Cenvat Credit on Rent-a-cab Operator's Service:

The second issue pertained to the denial of Cenvat Credit on Rent-a-cab operator's service. The department argued that this service was included in the negative list effective from 01.04.2011, and therefore, the appellant was not entitled to credit for the service tax paid on it. The appellant failed to provide sufficient evidence or documentation to justify the use of this service in their manufacturing process or business operations.

The tribunal agreed with the department's position, noting that the appellant did not substantiate their claim regarding the necessity of Rent-a-cab operator's service for their business activities. As a result, the tribunal disallowed the Cenvat Credit on this service, and the appellant was directed to pay interest on the amount under Rule 14 of the CCR, 2004. However, no penalty was imposed under Rule 15 of the CCR, 2004.

Conclusion:

The tribunal partially allowed the appeal. It upheld the appellant's entitlement to Cenvat Credit on the services of Renting of immovable property, Management, maintenance or repair, Transportation of goods by road, Event Management, and Commercial or Industrial Construction. However, it disallowed the credit on Rent-a-cab operator's service due to its inclusion in the negative list and lack of substantiation by the appellant. The order was pronounced in court on 18.07.2024.