Case Law Details
Solar Industries India Limited Vs Commissioner, Central Excise, Customs and Service Tax (Bombay High Court)
HC held that Cenvat Credit not eligible on facility of transportation provided by the appellant to its employees as same was merely in the nature of service for personal use or consumption of its employees.
It was found by the Tribunal that by virtue of the amendment dated 01.04.2011 rent-a-cab service had been excluded from the definition of the term “input service”. The same was in three limbs and the material basis for denying such cenvat credit was in view of Clause (B) to Rule 2(1) of the said Rules. We find that the Tribunal was justified in disallowing cenvat credit for the reasons mentioned in the impugned order. This is also clear from a reading of Section 65(105) of the Finance Act which excludes rent-a-cab scheme. The transportation of employees from distance of about 40 kms for reaching factory is not an activity which could be said to be a part of manufacturing activity. It is merely for personal convenience of the employees to enable them to reach the premises of the factory so as to thereafter participate in the manufacturing activity.
The facts of the present case also indicate that the facility of transportation provided by the appellant to its employees was merely in the nature of service for personal use or consumption of its employees.
Tribunal did not commit any error whatsoever in disallowing cenvat credit to the appellant after 01.04.2011 in view of the amended provisions. The service provided was mere in the nature of personal service to its employees which is not permitted to be treated as “input service”.
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