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M/s Hindustan Zinc Ltd. Versus Commissioner of Central Excise And Service Tax, Jaipur-II

2016 (8) TMI 482 - CESTAT NEW DELHI

Cenvat credit - 'Rent-a-Cab' service for engaging cabs for carrying staff from residence to the factory and back - Commissioner (A) denied credit on the ground which was not mentioned in the SCN that appellant recovered cost of transportation from its employees - ground mentioned in the SCN was that the impugned service was not an input service as it had no nexus with the manufacture of the final product. - Held that:- apart from the fact that the Commissioner (Appeals) has taken this new gr .....

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gh, Member (T) For the Appellant : Ms Sukriti Das, Adv For the Respondent : Mr G R Singh, DR ORDER Per R. K. Singh Appeals have been filed against Order-in-Appeal dated 02.03.2015.The issue involved in these appeals is whether CENVAT credit is permissible under 'Rent-a-Cab' service for engaging cabs for carrying staff from residence to the factory and back. While the primary adjudicating authority allowed the credit, the Commissioner (Appeals) disallowed the same on the ground that the a .....

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service used for transporting employees to and from factory is no longer res integra having been decided in favour of the appellant by Karnataka High Court in the case of CCE Vs. Interplex Electronics India Pvt. Ltd. [2015 (39) STR 578 (Kar.)] and also by CESTAT in the case of Prayas Engineering Ltd. Vs. CCE [2015 (37) STR 508 (Tri.-Ahmd.)]. She also asserted that the recovery of ₹ 110/- p.m. and ₹ 150/- p.m. from the employee represented only a token amount towards for the cost of t .....

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taka High Court clearly held that rent-a-cab service used for transportation of employees from home to factory and back to home qualified for input service for the purpose of CENVAT credit. CESTAT judgement in the case of Prayas Engineering Ltd. Vs. CCE (supra) cited the CBEC circular No.943/4/2011-CX, dated 29.04.2011 in support of its decision that such credit is admissible. As regard the contention of the ld. Departmental Representative that the appellant had recovered the cost of transportat .....

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he Show Cause Notice. That apart, the appellant has categorically stated that the amount collected from the staff towards transport from residence to factory and back was a token amount and that no part of the impugned service tax was recovered from the employees and the entire service tax of which credit was taken was borne by the appellant. It is also worth noting that in the case of CCE, Nagpur Vs. Ultratech Cement Ltd. (supra), the Bombay High Court observed as under:- "39. The Larger B .....

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