2019 (6) TMI 569 - AT - Service Tax

Tribunal grants CENVAT credit for Rent-a-Cab services; exclusion clause inapplicable for capital goods.

The Tribunal allowed the appellant's appeals, finding the impugned order unsustainable in law. The appellant was held entitled to CENVAT credit on service ... CENVAT Credit - input services - Rent-a-Cab service - period December 2013 to September 2014 - HELD THAT:- Tribunal in the case of M/S. MARVEL VINYLS LTD. VERSUS C.C.E. INDORE [2016 (11) TMI 1126 - CESTAT NEW DELHI] has considered the issue after the amendment in the definition of input service after 1.4.2011 where it was held that the interpretation of the lower authorities that motor vehicle are not capital goods for the services recipient cannot be appreciated in as much as motor vehicles are admittedly capital goods in terms of the Rule 2 (A) of Cenvat Credit Rules - credit allowed - appeal allowed - decided in favor of appellant. Issues:Appeal against rejection of appeals by Commissioner (A) regarding ineligible CENVAT credit of service tax for Rent-a-Cab service.Analysis:The appellant filed two appeals against the Commissioner (A)'s order rejecting their appeals regarding ineligible CENVAT credit of service tax for Rent-a-Cab service. Both appeals were disposed of together due to identical issues. The appellant, a service tax registrant under 'Telecommunication Service,' availed ineligible CENVAT credit during December 2013 to September 2014. A show-cause notice was issued, and the demand was confirmed with interest and penalty. The appellant argued that the impugned order did not properly appreciate the definition of 'input service' and cited judicial precedents to support their case. The appellant contended that the services hired were essential for their output service and not excluded under Rule 2(l). The AR defended the impugned order.The Tribunal analyzed the definition of input service and the exclusion clause introduced in 2011. The Tribunal considered the case law cited by the appellant and held that the exclusion clause did not apply if the motor vehicle was a capital good. The Tribunal noted that the interpretation of the lower authorities regarding capital goods for the service recipient was flawed. The Tribunal held that the appellant was entitled to CENVAT credit on the service tax paid on the services. Relying on previous decisions, the Tribunal set aside the impugned order and allowed both appeals with consequential relief.In conclusion, the Tribunal found the impugned order unsustainable in law and set it aside, allowing the appeals of the appellant. The judgment was pronounced in open court on 11/06/2019.