Cenvat credit on employee transport by rent-a-cab was admissible, subject to verification of any employee recovery

Cenvat credit on rent-a-cab service used to transport employees to the factory for official work was treated as admissible, because the service had a direct business nexus. Any recovery from employees towards transportation charges had to be verified, and credit would be denied to the extent of such recovery with corresponding reversal. The matter was remitted only to ascertain whether employee contributions had been collected and, if so, to adjust the credit accordingly.

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Issues: Whether Cenvat credit was admissible on rent-a-cab service used for transporting employees to the factory, and whether any amount recovered from employees towards transportation charges would require denial of credit to that extent.

Analysis: The service was used for transporting employees to the company for official work, and credit was held admissible on that basis. The question whether any recovery was made from employees towards transportation charges was left for verification, since any such recovery would affect admissibility to that extent and would require corresponding reversal.

Conclusion: Credit on the service was held admissible, but the matter was remitted to ascertain employee recovery and to deny credit to that extent if any recovery was found.

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