Appeal granted for helicopter service credit, Rent-a-Cab credit reversed, and Management Consultancy credit upheld. Penalty overturned.

The tribunal allowed the appeal, ruling that credit on the helicopter service was eligible, directed the reversal of proportionate credit on Rent-a-Cab service, and upheld the eligibility of credit on Management Consultancy service. The penalty was set aside.

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Issues:
1. Eligibility of Cenvat credit on input services - Management, Maintenance and Repair service of helicopter, Rent-a-cab service, and Management Consultancy service.

Analysis:

1. Management, Maintenance, and Repair Service of Helicopter:
The appellant, a manufacturer of excisable goods, availed Cenvat credit on input services, including the maintenance of a helicopter. The department contended that the appellant failed to prove the services' direct relation to manufacturing activities. The appellant argued that as per Rule 6(5) of the Cenvat Credit Rules, credit should be allowed even if part of the service is used in manufacturing. The tribunal noted that the helicopter was used for transportation of company Directors and Chairman, and service tax was paid under "Business Auxiliary Service." The tribunal held that the denial of credit based on usage not being exclusive to the appellant's unit was incorrect, as the service definition was broad, covering activities related to business.

2. Rent-a-Cab Service:
Regarding the Rent-a-Cab service, it was used for transporting officers, and the cost was partly recovered from employees. The Commissioner held that proportionate credit should be reversed due to cost recovery. The tribunal disagreed, stating that the denial of the entire credit was erroneous. It directed the appellant to reverse only the proportionate credit related to the cost recovered from employees.

3. Management Consultancy Service:
The eligibility of credit on Management Consultancy service was questioned by the Commissioner, citing lack of evidence on exclusive use for the appellant's unit and the nature of consultancy provided. The tribunal found no factory-based eligibility requirement in the input service definition. It held that since the consultancy provided was not disputed, the denial of credit based on vague allegations was unsustainable. The tribunal deemed the credit on Management Consultancy service eligible.

4. Penalty Imposition:
Regarding the penalty, the tribunal considered the interpretative nature of the issue and concluded that no penalty was warranted. The penalty was set aside based on this interpretation.

In conclusion, the tribunal allowed the appeal, ruling that credit on the helicopter service was eligible, directed the reversal of proportionate credit on Rent-a-Cab service, and upheld the eligibility of credit on Management Consultancy service. The penalty was set aside.

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