Appellant's Fleet Management Tax Dispute Remanded for Pending Taxability Issue

The appellant provided fleet management and lease rental services, facing a demand notice for service tax on lease rental service treated as rent-a-cab service. The Hon'ble Delhi High Court remanded the matter to the adjudicating authority based on the pending taxability issue. The recovery of service tax under Rule 6(3) of the Cenvat Credit Rules, 2004 was also subject to the High Court's decision, leading to the appeal being remanded for further consideration post the High Court's judgment.

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Issues:
1. Taxability of lease rental service as rent-a-cab service.
2. Recovery of service tax under Rule 6(3) of the Cenvat Credit Rules, 2004 for input services utilized in both taxable and exempted services.

Issue 1: Taxability of Lease Rental Service
The appellant provided fleet management and lease rental services during 2006-07 to 2010-11. A demand notice was issued for recovery of service tax on lease rental service, treating it as rent-a-cab service. The appellant claimed exemption for lease rental service, leading to a demand for service tax. The Commissioner confirmed this demand, prompting the appellant to challenge it in the Hon’ble Delhi High Court. The appellant argued that resolving the taxability issue of lease rental service would automatically resolve the demand under Rule 6(3) of the Cenvat Credit Rules, 2004. The Revenue did not contest that the issue of taxability was pending before the High Court. It was agreed to remand the matter to the adjudicating authority based on the High Court's decision. Consequently, the impugned order was set aside, and the appeal was remanded for further consideration post the High Court's judgment.

Issue 2: Recovery of Service Tax Under Rule 6(3) of the Cenvat Credit Rules
The appellant faced a show cause notice for non-reversal of cenvat credit under Rule 6(3) of the Cenvat Credit Rules, 2004, for the period of 2006-07 to 2010-11. This notice was related to the utilization of common input services in providing both taxable and exempted services. The parties agreed that the resolution of the taxability issue of lease rental service before the Hon’ble Delhi High Court would impact the decision on this matter. The Tribunal decided to remand the case to the adjudicating authority to determine the issue post the High Court's judgment in the writ petition filed by the appellant. The appeal was allowed by way of remand, awaiting the High Court's decision for further proceedings.

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