Solar Industries India Limited Vs Commissioner (Supreme Court of India)
Factual Background
Solar Industries India Limited (the appellant) manufactures explosives at factory premises in Mouza Chakdoh and Bazargaon, District Nagpur, located approximately 40 km from Nagpur City. To enable its workers to reach the facility, the appellant hired buses from Hansa Travels to pick up employees from designated spots in Nagpur and transport them to the factory. Hansa Travels levied service tax under the service operator category, which the appellant paid and subsequently claimed as CENVAT Credit.
Read HC Judgment in this case: Bombay HC Disallows CENVAT Credit on Employee Bus Transportation Services
Proceedings Before the High Court
The Adjudicating Authority issued eleven show-cause notices covering the period from July 2009 to December 2015. While credit was permitted for July 2009 to March 2011, the Adjudicating Authority issued an order on 28.12.2016 disallowing CENVAT Credit for the period from 01.04.2011 to 31.12.2015, ordering recovery with interest under Rule 14 and imposing a penalty under Rule 15 of the CENVAT Credit Rules, 2004 (the Rules). This was based on the 01.04.2011 amendment to the definition of “input service” in Rule 2(l), which excluded services used primarily for personal use or consumption of employees.
