Whether Rent-a-cab service used for bringing employees to work in the factory for manufacture goods is eligible Input Service for the purpose of Cenvat Credit.

The answer is yes.

While referring the meaning of Input Service assigned to rule 2(l) of the Cenvat Credit Rules, 2004, honorable tribunal has held that:

"From the above definition, it is very clear that the input services besides being used in or in relation to the manufacture of final products and clearances of final products from the place of removal includes a plethora of other services such as service used in relation to setting up, modernization, renovation or repairs of factory, premises of provider of input service or an office relating to such factory or premises, advertisement or sales, activities of business, accounting, auditing, financing, recruitment, quality control, training and coaching etc. and therefore its scope is much larger than being used directly or indirectly in relation to manufacture. The decision cited by Revenue are therefore not relevant as those decisions have not considered the inclusive part of input service as defined under rule 2(l) of Cenvat Credit Rules and these decisions have only considered the term in or in relation to the manufacture. Since Rent-a-Cab service is used for bringing employees to work in the factory for manufacture of goods it has to be considered as being used indirectly in relation to the manufacture or as part of business activity for promoting the business as any facility given to the employees will result in greater efficiency and promotion of business."

For full text of judgment - visit: 2008 -TMI - 30004 - CESTAT, MUMBAI

In this case, CESTAT has relied upon and followed the following judgments:

2008 -TMI - 31794 - SUPREME Court - ROYAL HATCHERIES PVT. LTD. Versus. STATE OF A.P.

2006 -TMI - 620 - CESTAT, MUMBAI - INDIAN RAYON & INDUSTRIES LTD. versus COMMR. OF C. EX., BHAVNAGAR

2008 -TMI - 3506 - CESTAT, MUMBAI - MANIKGARH CEMENT Versus COMMISSIONER OF C. EX. & CUSTOMS

2008 -TMI - 4051 - CESTAT BANGALORE - KELTECH ENERGIES LIMITED Versus COMMISSIONER OF C. EX., MANGALORE