Cenvat credit on rent-a-cab services allowed for pre-cut-off services under a binding circular.

Cenvat credit on rent-a-cab services was admissible for services received in the pre-1-4-2011 period, because a binding departmental circular clarified that credit remained available where service provision was completed before that cut-off date. As the relevant transactions fell within September 2010 to March 2011, the pre-amendment regime applied and the lower authorities were bound by the circular. The credit denial was therefore unsustainable, and the demand disallowing credit did not survive.

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Issues: Whether Cenvat credit was admissible on rent-a-cab services availed for the period prior to 1-4-2011.

Analysis: The credit dispute was decided by reference to the departmental circular clarifying that credit on services received before 1-4-2011 would remain available if provision of the service had been completed before that date. Since the relevant period was September 2010 to March 2011, the appellant's claim fell within the pre-amendment regime. The lower authorities were bound by the circular, and the services in question were treated as eligible for credit.

Conclusion: The Cenvat credit on rent-a-cab services was admissible and the issue was answered in favour of the appellant.

Final Conclusion: The demand disallowing credit did not survive and the appellant obtained the relief sought.

Ratio Decidendi: Where a binding departmental circular clarifies that credit remains available for services received before a cut-off date, the credit cannot be denied for transactions falling within the covered pre-cut-off period.

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