2009 (9) TMI 270 - AT - Service Tax

CESTAT Bangalore: Upholds CENVAT credit for rent-a-cab services, penalties not mandatory

The Appellate Tribunal CESTAT, Bangalore, upheld the decision in favor of the appellant/assessee, allowing CENVAT credit for services like rent-a-cab. The ... Cenvat Credit- confiscation and penalty- In this case adjudicating authority deny the Cenvat credit to the assessee of the service tax paid on the services ‘rent-a-cab’ but has not imposed any penalty. Aggrieved by this order, revenue filed appeal to the commissioner (Appeals), dismiss the appeal. In the light of the decision of ABB Ltd. v. CCE & ST 2009 -TMI - 34139 - CESTAT, BANGALORE, held that assessee was eligible for benefit of Cenvat Credit, thus the appeal filed by revenue rejected. The Appellate Tribunal CESTAT, Bangalore, consisting of M.V. Ravindran, Judicial Member, and P. Karthikeyan, Technical Member, heard appeals against OIA Nos. 6 to 10/2009(H-I)DCE, dated 27-2-2009. The main issue was the denial of CENVAT credit to the assessee for service tax paid on services such as rent-a-cab. The adjudicating authority and the Commissioner (Appeals) did not impose penalties on the respondent, leading to the revenue filing appeals. The revenue argued that penalties should be mandatory for such violations, while the appellant's counsel contended that the denial of CENVAT credit was not erroneous. The Tribunal upheld the decision in favor of the appellant/assessee, allowing the CENVAT credit based on the interpretation of the CENVAT Credit Rules, 2004. Consequently, the appeals filed by the revenue were rejected, and the impugned order was upheld. The respondents were deemed eligible for the CENVAT credit on the services provided by them.