The Chennai bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the Wipro Enterprises is not eligible to avail cenvat credit on the rent-a-cab services availed for pick up and drop its employees for the period January 2011 to March 2013.
The appellants, engaged in the manufacture of hydraulic cylinders and part thereof, availed rent-a-cab service for the period from January 2011 to March 2013. These services were availed for pick up and drop facilities of the employees. The employees are deployed for work even in odd hours being related to IT work. The department denied the credit.
Before the authorities, the appellants contended that the services are directly linked with the performance of the employees for performing the work efficiently. It was also argued that the credit on the services has been rightly availed. It was also submitted by him that even though Clause B of the definition of input services excludes the services provided by the motor vehicle service provider, it is difficult for the service recipient to verify whether the motor vehicles are capital goods for the service provider. It was also submitted that the issue being interpretational and also during the transitional period, when the amendment was introduced to the definition of input services, he pleaded that the penalties may be waived.
The Tribunal noted that since the definition of inputs had a wide ambit, credit is eligible. I hold that the credit for the period up to 31.3.2011 is eligible and the demand for this period is set aside.
“After 1.4.2011, the definition of input service has been amended to include certain exclusion clauses. Clause B of the said definition excludes services relating to motor vehicles and the said credit would be eligible only if the motor vehicles are capital goods for the service provider. This Tribunal in the case of Sundaram Clayton Ltd. vide Final Order No. 41952/2018 dated 9.7.2018 has discussed the issue in detail. Taking into consideration the fact that the appellant has not produced any evidence to establish that the motor vehicles are capital goods for the service provider for the period from 1.4.2011 to 31.3.2013, I am of the view that credit is ineligible and the demand for the said period is therefore upheld,” the Tribunal observed.To Read the full text of the Order CLICK HERE