Custom, Excise & Service Tax Tribunal
Aia Engineering Ltd vs Ahmedabad-Ii on 12 June, 2018
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
West Zonal Bench, Ahmedabad
-ooOoo-
Appeal No.: E/10031/2018-SM
Arising out of order no. AHM-EXCUS-002-APP-84-85-17-18
Aia Engineering Ltd. - Appellant(s)
Vs
C.C.E. & Ahmedabad-iii - Respondent(s)
Represented by For Applicant(s) : Shri S.J. Vyas (Advocate) For Respondent(s) : Shri S.K. Shukla, Suptd. (AR) CORAM :
Shri Ramesh Nair, Hon'ble Member (Judicial) Date of Hearing/ Decision: 12.06.2018 ORDER No. A/11320/2018 Per : Ramesh Nair , The dispute relates to Cenvat Credit on input services namely Construction services, convention services and rent a cab services. The period involved is after 01.04.2011. The Revenue disallowed the CENVAT on the ground that as regarding construction services and rent a cab services, these services were excluded from the purview of definition of input service provider in Rule 2 (e) of CENVAT Credit Rules, 2004. As regards the convention services are considered, the credit was disallowed on the ground that the workshop on maintenance of bulk handling system is optional services for the appellant. Therefore not necessary in relation to manufacture.
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2. Sh. Amit Laddha, Ld. Counsel appearing on behalf of the appellant submits that the construction service is not for a new construction whereas it is in respect of maintenance and repair of the existing plant and machinery. The repair and maintenance service is not excluded from the definition of input services. As regard the rent a cab services, he submits that rent a cab service per se was not excluded whereas it is excluded only when the motor vehicle which was rent out by the services provider is not a capital goods whereas in the present case, the motor vehicle is provided under the definition of capital goods. Therefore, rent a cab service is admissible for CENVAT. As regards, the convention services, he submits that the services was availed for organising a workshop on maintenance of bulk handling system which is directly useful in or relation to the manufacture and for removal of goods. He placed reliance on following judgements:
1. Integra Software Service Pvt. Ltd. v/s Commr. Of C. Ex. Puducherry 2017 (50) S.T.R. 145 (Tri. Chennnai)
2. Marvel Vinyls Ltd. v/s Commissioner of Central Excise, Indore 2017 (49) S.T.R. 424 (Tri. Del)
3. Godawari Power and Ispat Ltd. v/s Commr. of Central Excise and Service Tax, Raipur 2018-TIOL-456-CESTAT-DEL
3. Shri S.K. Shukla, Ld. Superintendent. (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that as regards the construction services, the Ld. Commissioner had remanded the matter to the adjudicating authority for the verification of the fact that whether the service is of construction or repair maintenance 3 | Page E/10031/2018-SM and use of such services in their factory. Therefore, in respect of construction services it can be decided only after verification of the fact. As regards rent a cab service, he submits that as per the exclusion brought in rule 2(e) of CENVAT Credit Rules,2004, the rent a cab service is not admissible for CENVAT credit. Regarding convention services, he reiterates the findings given by the Commissioner. He also placed reliance on the following judgement :
1. SKD Lakshmanan Fireworks Industries Vs. CCE, Tirunelveli 2016 (42) STR 359 (Tri- Chennai) -
2. Circular No. 943/4/2011-CE Dt. 29.04.2011
3. Mahindra & Mahindra Ltd. Vs. CCE, Hyderabad-I 2016 (45) STR 92 (Tri.- Hyd)-
4. - India Cements Ltd. Vs. CCE, Guntur- 2016 (45) STR 557 (Tri-Hyd)
4. I have carefully considered the submission made by both the sides and perused the records. The limited issue is to be decided is whether the appellant is entitled for CENVAT credit in respect of services namely, construction service, rent a cab service and conventional services. As regards the conventional service, the Ld. Commissioner (Appeals) has remanded the matter to the adjudicating authority for verification whether it is a construction and the actual use of services. Therefore, I do not incline to interfere in the finding given by the Ld. Commissioner on construction services.
5. As regard the services of rent a cab, though the exclusion in respect of rent a cab services was made with effect from 01.04.2011, the exclusion entry reads as (B) services provided by way of renting of a 4 | Page E/10031/2018-SM motor Vehicle, is so far as they relate to a motor vehicle which is not the capital goods. On reading of the above entry, the rent a cab service was excluded only in a case where a motor vehicle which is rented out is not a capital goods. To ascertain whether in the facts of the present case, the motor vehicle is a capital good or otherwise, I have gone through the definition of 'capital goods'. As per the definition of capital goods provided in Rule 2 (a) under the clause (B), the entry of motor vehicle which reads as, " Motor Vehicle falling under Heading 87.02, 87.03, 87.04, 87.11 and their chasis registered in the name of provider of output services for providing taxable services as specified in sub clause (f), (n), (o), (zr), (zzp), (zzt) and (zzw) of clause (105) of section 65 of Finance Act. In the present case, the passenger vehicle was taken on rent by the appellant which falls under Chapter Head 87.02 and the rent a cab service falls under clause (0) sub clause (o) of clause 105 of section 65 of the Finance Act. Accordingly, in terms of clause (B) of definition of capital goods provided under Rule 2 (a) the motor vehicle taken on rent by the appellant is a capital good. Therefore, it does not cover under the exclusion entry provided under clause 2 (e) under sub clause B of Rule 2(a) of CENVAT credit rules. Therefore, rent a cab is an admissible input service and credit is admissible. As regard conventional services, the credit was denied only on the ground that it is an optional service for the appellant. I do not understand how the Revenue can decide which are the optional and which are the essential services of a business organization. From the fact it is clear that conventional services was availed for upgrading their overall system of maintenance of bulk handling which is related to the manufacture and removal of goods. Therefore, in my considerate view, the credit is admissible. As per my above discussion, the 5 | Page E/10031/2018-SM demand in respect of conventional service and rent a cab service is set aside. As regard construction service, I uphold the finding of the Ld. Commissioner s as much as he has directed to the adjudicating authority for verification. Accordingly, the appeal is disposed off in above terms.
(Dictated and pronounced in the open Court) (Ramesh Nair) Member (Judicial) Diksha