Input Service Eligibility: rent a cab for official employee transport and steel for embedded support structures qualify for cenvat credit.

The note addresses entitlement to cenvat credit for (i) rent a cab services used to transport employees for official purposes and (ii) steel items used to fabricate support structures embedded in the earth for installation of capital goods. It applies the definition of input service and existing tribunal precedents to treat employee transportation as an integral input service, allowing credit; and treats materials forming part of support structures as inputs for manufacture/installation of capital goods, allowing credit. Both positions conclude in favour of claimants and recommend relief against the impugned order.

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Issues: (i) Whether cenvat credit is admissible on rent-a-cab service used for transportation of employees for official purposes; (ii) Whether cenvat credit is admissible on steel items (MS angle, channel etc.) used in fabrication of support structures embedded to earth for installation of capital goods.

Issue (i): Entitlement to cenvat credit on rent-a-cab service used for official transportation of employees.

Analysis: The issue was decided with reference to the characterization of the rent-a-cab service as an input service integral to the recipient's business activity and by application of the definition of service as reproduced in Rule 2(l) of the Rules and consistent Tribunal precedents permitting credit where transportation of employees is for official purposes.

Conclusion: Cenvat credit on rent-a-cab service used for transportation of employees for official purposes is allowed in favour of the assessee.

Issue (ii): Entitlement to cenvat credit on steel items used in fabrication of support structures embedded to earth for installation of capital goods.

Analysis: The issue was decided by treating the steel items as inputs used in the manufacture/installation of capital goods; reliance was placed on Tribunal precedent holding that materials forming part of support structures for capital goods are admissible for cenvat credit despite being embedded to earth.

Conclusion: Cenvat credit on the steel items used in fabrication of support structures for installation of capital goods is allowed in favour of the assessee.

Final Conclusion: Both issues decided in favour of the assessee result in setting aside the impugned order and allowing the appeal with consequential relief.

Ratio Decidendi: Input services used for official employee transportation qualify as integral input services for cenvat credit, and materials used in fabrication of support structures for installation of capital goods qualify as inputs eligible for cenvat credit even if embedded to earth.

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