While confirming a demand in relation to availment of cenvat credit of service tax paid on ‘rent-a-cab’ service, the CESTAT, Delhi bench has held that since the availment was without malafide intention, the penalty on the appellant shall be deleted.
The department disallowed of cenvat credit from payment of service tax on the input service ‘rent-a-cab’ service for Rs. 1,76,042/- for the period July, 2016 to June, 2017. On appeal, Commissioner (Appeals) observed that ‘rent-a-cab’ service falls under exclusion clause (B) of the definition of input service in Rule 2(l), hence the same has been rightly disallowed.
Before the Tribunal, the appellant contended that they have bonafidely taken the cenvat credit, and have maintained a proper record of the transaction.
Mr. Anil Choudhary, Technical Member held that “Having considered the rival contentions, I find that there was no malafide on the part of the appellant in taking cenvat credit of service tax paid on ‘rent-a-cab’ service. Accordingly, the demand on this score is confirmed. The penalty imposed is set aside. Thus, the appeal is allowed in part modifying the impugned order in appeal.”
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