2018 (6) TMI 180

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....the Commissioner (Appeals). The contest was only in respect of penalty and interest. The original authority dropped the interest in the adjudication order, however, imposed penalty of equal amount. The said adjudication order was challenged by the assessee as well as Revenue. The assessee's challenge was on imposition of penalty and Revenue's appeal was on setting aside of the interest demand. The Commissioner (Appeals) reduced the penalty from 100% to 25% and as regards interest, he ordered for payment thereof prior to 1.4.2012. However, the interest post 1.4.2012 was upheld. Now the appellant is before me challenging the penalty of 25% and demand of interest upto 1.4.2012. 2. Shri Prasad Paranjape, learned counsel appearing on behalf o....

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....nterest and penalty does not sustain. 3. Shri Sanjay Hasija, learned Superintendent (AR) appearing on behalf of the Revenue, reiterates the finding of the impugned order. He submits that the rent-a-cab service is clearly excluded in the definition of input service with effect from 1.4.2011. Therefore, the credit is not admissible. For this reason itself, the penalty and interest upheld by the lower authority should be maintained. In this regard, he placed reliance on the judgment of this Tribunal in the case of Vinati Organics Ltd. vs. CCE&ST, Ratnagiri - Order No. A/90639/17/SMB dated 13.10.2017. Shri Hasija also invited my attention towards the budgetary changes as per TRU's letter No. 334/3/2011-TRU dated 28.2.2011 wherein it was clar....

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....tion in respect of motor vehicle and came to the conclusion that if the motor vehicle which was rented out is a capital goods for the service provider, such service does not stand excluded from the purview of input service as provided under Rule 2(l) of the Cenvat Credit Rules, 2004. As regards the submission made by the learned AR and reliance placed on the budgetary changes, I reproduce the said budgetary changes provided in para B clause 1.8 of TRU's letter No. 334/3/2011-TRU dated 28.2.2011:- "Similarly services relating to motor vehicle i.e. rent-acab, use of tangible goods, insurance or repair of vehicle shall not constitute an 'input service' except in respect of output services where credit on motor vehicle is permitted as 'capit....