2018 (5) TMI 1357 – CESTAT CHENNAI – TMI – CENVAT credit – input services – rent-a-cab service – Department was of the view that these services were neither used directly nor indirectly nor in relation to the manufacture and therefore the said services do not qualify as input services for availing Cenvat credit of service tax paid on the said services – whether the appellants are eligible for Cenvat credit on ‘Rent-a-Cab service? – Held that: – the Hon’ble Supreme court in the case of M/s. Maruti Suzuki Ltd. Vs. CCE, Delhi [2009 (8) TMI 14 – SUPREME COURT] has held that crucial requirement for availment of input credit of all goods is ‘used in or in relation to the manufacture of final products’ – In the case on hand, admittedly, the Revenue has not negatived the plea of the appellant that the service availed of Rent-a-cab service had been used for official purposes by the employees of the appellant, for or during the business. There is also no dispute with regard to the period involv
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t they had availed Cenvat credit of service tax paid on various services for the period from June 2011 to May 2012. The department was of the view that these services were neither used directly nor indirectly nor in relation to the manufacture and therefore the said services do not qualify as input services for availing Cenvat credit of service tax paid on the said services. Hence a SCN dated 05.07.2012 was issued proposing recovery of service tax credit availed during the period from June 2011 to May 2012 along with interest and imposition of penalty under Rule 15(1) of the Cenvat Credit Rules, 2004. On adjudication, the adjudicating authority allowed the credit taken on various services except Rent-a-Cab service to the tune of ₹ 1,19,027/-, charged interest and imposed a penalty of ₹ 11,902/- under Rule 15(1) of CCR, 04 read with Section 11 AC of the Central Excise Act, 1944. In appeal, the Commissioner (Appeals) upheld the order of the adjudicating authority. Hence this
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missions:- 1. CCE, Vadodara Vs. Hadyn Glass Gujarat Ltd. 2009 (240) ELT 729 (Tri.) 2. Jaypee Rewa Plant Vs. CCE, Bhopal 2010 (17) STR 519 (Tri.-Del) 3. J.K. Sugar Ltd. Vs. CCE, Meerut 2011 (270) ELT 225 (Tri.-Del) 4. CCE Vs. HEG Ltd. 2010 (20)STR 312 5. CCE, Visakhapatnam Vs. AP Paper Mills Ltd. 2011 (22) STR 126 (Tri.-Bang.) 6. CCE, Visakhapatnam Vs. AP Paper Mills Ltd. 2010 (254) ELT 354 (Tri.-Bang.) 7. CCE Nagpur Vs. Ultratech Cement Ltd. 2010 (20) STR 577 (Bom.) 8. Integra Software services Pvt. Ltd.Vs. CCE 2017 (48) STR 137 (Tri-Chen.) 9. CCE, Bangalore Vs. Interplex Electronics (I) Ltd 2015 (39) STR 578 (Kar.) 10. Source HOV India Pvt.Ltd. Vs. CST, Chen. 2016 (45) STR 233 (Tri.-Chen. 11. Sundaram Clayton Ltd. Vs. CCE, Chen. 2016 (42) STR 741 (Tri.-Chen.) 12. Wipro Ltd. Vs. CCE, Pondicherry 2018 (4) TMI 967 -CESTAT-Chennai He further submitted that since the appellants are eligible to avail cenvat credit in respect of Rent-a-cab service, no penalty is warranted as the issue is one
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ct was not disputed by the Revenue. In this context, it is very useful to refer to an order of this very Court in the case of Sundaram Clayton Ltd. (supra), wherein it has been held as under:- 5 (i) Rent a cab service is found to be essential for the transportation of the employees in the adjudication order itself. When such a service is not found irrelevant to the business or manufacturing activity, credit of input tax cannot be denied since rent a cab service is essential for the movement of the employees of the factory and to carry out business activity. 5.2 Further, the Hon ble High Court of Karnataka in the case of CCE Vs. Stanzen Toyotetsu India Pvt. Ltd. – 2011 (23) STR 444 (Kar.), while considering a similar issue has held as under:- 13. Rent-a-Cab service is provided by the assessee to these workers to reach the factory premises in time which has a direct bearing on the manufacturing activity. In fact the employee is also entitled to conveyance allowance. It also would form pa
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n or in relation to the manufacture of final products . In the case on hand, admittedly, the Revenue has not negatived the plea of the appellant that the service availed of Rent-a-cab service had been used for official purposes by the employees of the appellant, for or during the business. There is also no dispute with regard to the period involved in the present case that it was prior to 01.04.2011. The Revenue has lost sight of the fact that the said service was provided by the appellant to its workers to reach the factory premises in time which has a direct bearing on the manufacturing activity/production which, otherwise, the employees would have claimed conveyance allowance. Thus, going by the facts and circumstances and the decisions referred to supra, I am of the considered view that the appellant is eligible to avail Cenvat credit of rent-a-cab service up to 01.04.2011 along with consequential relief, if any. It is ordered accordingly. ( Operative part of the Order pronounced i
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