Appellant Granted Waiver & Stay for CENVAT Credit Denial on Services The appellant sought waiver of pre-deposit and stay of recovery against the denial of CENVAT credit for 'Rent-a-cab service' and 'Convention service' for ...
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Appellant Granted Waiver & Stay for CENVAT Credit Denial on Services
The appellant sought waiver of pre-deposit and stay of recovery against the denial of CENVAT credit for 'Rent-a-cab service' and 'Convention service' for the period from March to October 2009. The judge ruled in favor of the appellant regarding the 'convention service' and 'rent-a-cab service' used for employee conveyance. The appellant was directed to pre-deposit Rs. 20,000 within six weeks for the 'Rent-a-cab service', with waiver and stay granted for the remaining dues upon compliance.
Issues: - Waiver of pre-deposit and stay of recovery against denial of CENVAT credit for 'Rent-a-cab service' and 'Convention service' for the period from March to October 2009.
Analysis: The appellant sought waiver of pre-deposit and stay of recovery against the denial of CENVAT credit amounting to Rs. 54,543/- for 'Rent-a-cab service' and 'Convention service' for the period from March to October 2009. The lower appellate authority had expressed ambiguity regarding the nature and purpose of the 'Rent-a-cab service', stating it did not clearly fall within the definition of 'input service' under Rule 2(l) of the CENVAT Credit Rules 2004. However, the appellant's consultant argued that the show-cause notice acknowledged the use of 'Rent-a-cab service' for conveying company employees, which was factually correct upon examination of the notice. It was also noted that part of the 'Rent-a-cab service' was used for transporting food, a fact not contested. Regarding the 'Convention service', it was revealed that some employees attended conventions for coaching and training during the material period. The consultant contended that the appellant was entitled to CENVAT credit for the service tax paid on the convention service as it fell under the definition of 'input service'.
Upon reviewing the submissions, the judge took a prima facie view in favor of the appellant concerning the 'convention service' and the 'rent-a-cab service' used for employee conveyance. However, due to the absence of a break-up of the CENVAT credit availed on the 'Rent-a-cab service', the appellant was directed to pre-deposit Rs. 20,000 within six weeks. Compliance was to be reported to the Deputy Registrar by a specified date. Subject to this compliance, waiver and stay were granted against the remaining dues. The judgment was pronounced and dictated in an open court setting.
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