Manufacturer wins appeal to claim CENVAT credit for employee transport services pre-2011.

The appeal was allowed with consequential relief as the appellant, a manufacturer of automobile parts, successfully argued that rent-a-cab services used for picking up and dropping off employees were eligible for CENVAT credit during the period in question. The appellate authority found that the services fell within the definition of input service before 1.4.2011, allowing the appellant to claim the credit. Previous judgments from High Courts and a Tribunal decision supported the appellant's position, resulting in the disallowance of the credit being set aside.

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Issues:
Denial of CENVAT credit on rent-a-cab services during September 2009 to March 2010.

Analysis:
The appellant, a manufacturer of automobile parts, filed an appeal against the Commissioner (Appeals) order upholding the denial of CENVAT credit on rent-a-cab services. The appellants had availed CENVAT credit on these services for duty payment. The original authority disallowed the credit, imposed interest, and a penalty under Rule 15 of CENVAT Credit Rules, 2004. The Commissioner (Appeals) upheld the disallowance of credit and interest but set aside the penalty.

On behalf of the appellant, it was argued that the rent-a-cab services were used for picking up and dropping off employees. Reference was made to judgments from the Hon'ble High Courts of Karnataka and Madras, along with a Tribunal decision, to support the argument.

The Assistant Commissioner supported the findings of the impugned order. After hearing both sides, it was noted that the period in question was before 1.4.2011, when the definition of input service was broader, including 'activities relating to business'. Therefore, the appellants were eligible for CENVAT credit on rent-a-cab services. The judgments cited by the appellant's counsel were found to be applicable, and the impugned order disallowing the credit was set aside. The appeal was allowed with consequential relief.

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