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2016 (4) TMI 1069 - CESTAT CHENNAI

2016 (4) TMI 1069 - CESTAT CHENNAI - 2016 (43) S.T.R. 362 (Tri. - Chennai) - Eligibility of Cenvat credit - Management, Maintenance and Repair service of helicopter - Department denied credit on the ground that the helicopter was not exclusively used for the appellant's unit at Viralimalai - Appellant filed copy of Invoices raised by the appellant company on other companies for the usage of Helicopter and Service Tax has also been collected under the category “Business Auxiliary Service” - Held .....

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e and contract bus service - used exclusively for the transportation of officers - Commissioner (Appeals) has held that they recover the cost from the employees and there is no denial of the same - Held that:- a consistent stand taken by various Courts and Tribunals is that when there is a recovery of cost, the proportionate credit should be reversed. The denial of the entire credit is erroneous and the appellants are directed to reverse the proportionate credit to the extent of recovery of cost .....

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t elaborating as to the reason for the said belief is unsustainable. The show cause notice is the foundation for any proceeding. In this case, the allegation is too vague and therefore, the appellant's contention to the contrary cannot be doubted. Accordingly, credit is eligible. - Imposition of penalty - Held that:- the issue being interpretative in nature, penalty is not warranted and the same is accordingly set aside. - Decided in favour of appellant with consequential relief - Appeal No. .....

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opter owned by the Company, 2. Rent-a-cab service, 3.Management and Consultancy service. The department alleged that since the appellant Company have not proved that these services were used in or in relation to the manufacturing activity and accordingly held that credit was not available on the above mentioned services. 2. Ld. Counsel for the appellant company Shri V. S. Manoj, Advocate, argued that management, maintenance and repair service and management consultancy service are the services s .....

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the allegation that the services is in relation to other companies is without any basis, since their company is responsible to the shareholders and they cannot be paying for services rendered to other companies. 3. The department is being represented by Shri L. Paneerselvam, AC (AR). He submits that the Managing Director of the appellant company was also the Managing Director of other group companies and therefore, the expenses cannot be considered as nexus with the manufacturing activity of th .....

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to when such type of consultancy service was provided to the appellant company and for what purpose. The Ld. AR submits that the appellant assesse has not produced any contract to prove the nature of service nor specifically confirmed that they were used exclusively for the company purpose. Besides, the nature of consultancy given and how it is related to the business activity of the company and clearance of their final products was also not shown. 4.2 Regarding rent-a-cab service, he mentions t .....

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recovered from the employees. Such credit of service tax paid on the entire service cannot be held as ineligible. Further, as regards management consultancy service, he vehemently argued that the person concerned provided consultancy to the appellant company regarding financial management, and giving guidance in taking policy decisions of the company. He strongly objected to the allegation that the person concerned provided any service to any other company and the same is without any basis. He a .....

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e tax department under the category of 'Business Auxiliary Service' and are charging service tax on the invoices so raised. Management Consultancy Service has been availed from Shri Sankar, Management Consultant, Chennai and he has raised his invoices and has also charged service tax. Copies of his invoices are available on record. 5.1 On the availment of input service tax credit on services viz. Management, Maintenance & Repair service, ld. counsel relied on the following case laws .....

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defined under Rule 2 (l) of CCR, 2004. 6. I have carefully gone through the case records. The issue under dispute is whether the availment of Cenvat Credit on the following services are eligible for input service credit (i) Management, Maintenance and Repair service of helicopter (ii) Rent-a-cab and contract bus service and (iii) Management Consultant Service. 7. With regard to the eligibility of credit on the maintenance and repair service of helicopter, the ld. Commissioner (Appeals) has in pa .....

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n it was held that in this modern age, use of aircraft is to be considered as a bare requisite for business purposes and held that any service tax paid on the services for the maintenance of aircraft is admissible as credit. The Appellate authority has erred in holding that the dispute is not regarding ownership of the helicopter, but whether the services were utilized by the appellants unit. In the course of hearing, the Ld. Counsel has filed copy of Invoices raised by the appellant company on .....

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to consideration. The denial of credit is therefore incorrect and unsustainable. 8. As regards eligibility to credit on RentaCab service and contract bus service, which are used exclusively for the transportation of officers, the Commissioner (Appeals) has held that they recover the cost from the employees and there is no denial of the same. A consistent stand taken by various Courts and Tribunals is that when there is a recovery of cost, the proportionate credit should be reversed. The denial o .....

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