2023 (1) TMI 736 - AT - Central Excise

CENVAT Credit - input services - Rent-a-Cab service - denial on the ground that the Rent-a-Cab service is excluded from the purview of definition of input service - Applicability of exclusion Clause given in Rule 2(l) of Cenvat credit Rules, 2004 - HELD THAT:- The exclusion is provided in respect of those Rent-a-Cab service where the vehicle taken on rent is not a capital goods.

This very issue has been considered by this Tribunal in M/S. MARVEL VINYLS LTD. VERSUS C.C.E. INDORE [2016 (11) TMI 1126 - CESTAT NEW DELHI] where it was held that As such the interpretation of the lower authorities that motor vehicle are not capital goods for the services recipient cannot be appreciated in as much as motor vehicles are admittedly capital goods in terms of the Rule 2 (A) of Cenvat Credit Rules.

Reliance also placed in the case of GUALA CLOSURES (INDIA) PVT. LTD. VERSUS C.C.E., AHMEDABAD-II [2018 (10) TMI 1411 - CESTAT AHMEDABAD] where it was held that The services of Rent a cab and Hotel Accommodation are services are used for overall business activities of the appellant. The only business carried out by the appellant is manufacturing of excisable goods and sale thereof. Therefore, these services are actually related to the manufacturing activities of the appellant.

Thus, it can be seen that since the Motor Vehicle was held to be a capital goods, the eligibility of Cenvat credit on Rent-a-Cab service shall not be hit by the exclusion clause provided under Rules 2(l) of Cenvat Credit Rules, 2004 - In the present case also the vehicle taken on rent is defined as capital goods in terms of Rule 2(a) of the Cenvat Credit Rules, 2004, therefore, the exclusion clause is not applicable in the present case.

Appeal allowed - decided in favor of appellant.