Case Law Details
Kriti Industries (India) Ltd. Vs Commissioner, Customs, Central Goods Service Tax & Central Excise (CESTAT Delhi)
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.”
FULL TEXT OF THE CESTAT DELHI ORDER
The issue in this appeal relates to disallowance 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.
2. Vide the impugned order-in-appeal, the learned 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. Being aggrieved, the appellant has preferred appeal before this Tribunal inter alia on the ground that the appellant has bonafidely taken the cenvat credit, and have maintained proper record of the transaction. It was further urged that the appellant relies on the order-in-appeal passed by the Commissioner (Appeals) in their own case being Order-in-appeal No. IND-EXCUS-000-APP-127 to 130-13 dated 29.07.2013, wherein cenvat credit on ‘rent-a-cab’ service was allowed. In such circumstances, learned Counsel states that the demand for interest and penalty is fit to be set aside.
3. Learned Authorised Representative appearing for the Revenue relies on the impugned order.
4. 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.
