Rent-a-cab service remained eligible as input service where the vehicle was treated as capital goods, allowing Cenvat credit and refund.

Rent-a-cab service was not excluded from input service where the motor vehicle used by the service provider was treated as capital goods. The exclusion in Rule 2(l)(b) of the Cenvat Credit Rules, 2004 was read as applying to renting of motor vehicle services only when the vehicle is not capital goods, and the expression was construed with reference to the service provider rather than the recipient. On that basis, the service remained eligible as input service, and Cenvat credit with consequential refund was admissible.

---

---

Issues: Whether rent-a-cab service was excluded from the definition of input service for the relevant period and whether Cenvat credit and consequential refund were admissible.

Analysis: The exclusion in Rule 2(l)(b) of the Cenvat Credit Rules, 2004 applies only to renting of motor vehicle services where the motor vehicle is not capital goods. The service provider's motor vehicle was treated as capital goods, so the exclusion did not operate. Following the earlier coordinate bench view, the expression in the exclusion clause was read with reference to the service provider, not the recipient, and the service was held to remain eligible as input service.

Conclusion: Rent-a-cab service was not excluded from input service in the facts of the case, and the assessee was entitled to Cenvat credit and consequential refund.

---