TMI Blog2018 (7) TMI 688X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice, the said services would qualify as input services. In the present case, the department has not alleged that the motor vehicles are not registered in the name of the service provider. In fact, there is no allegation that the motor vehicle which was used for providing rent-a-cab service was not capital goods for the service provider. When the definition of input services makes an exclusion specifying the category of vehicles / service provider, which does not fall within the definition, it is incumbent upon the department to examine whether the impugned services fall within such exclusion or not before disallowing the credit - As the show cause notice does not raise any allegation with regard to the category of motor vehicle / serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the ground on which the credit has been denied is that the said services do not have nexus with the manufacturing activity and that these services are primarily used for the personal use or consumption of the employees of the appellants and therefore not eligible. He submitted that rent-a-cab services were used for transport of their employees for various business purposes and have direct nexus with the manufacturing activity. They are not for personal consumption of employees. Further, the authorities below have erred in holding that after 1.4.2011, the said services fell within the exclusion clause and is not eligible for credit. He relied upon the decision in their own case vide Final Order No. 41322 to 41324/2017 dated 26.7.2017 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o vaguely stated that the said services fall within the exclusion clause as per the definition of input service after 1.4.2011. It then becomes necessary to look into the relevant provisions of law before entering into the analyzation of the dispute. For convenience, the definition of capital goods in Rule 2(C) of CENVAT Credit Rules, 2004 is reproduced as under:- (C) Motor vehicle designed to carry passengers including their chassis, registered in the name of the provider of service, when used for providing output service of (i) transportation of passengers; or (ii) renting of such motor vehicle; or (iii) imparting motor driving skills The definition of input service is reproduced as under:- Input service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s including service listed under clause (b) of section 66E of the Finance Act (hereinafter referred as specified services) in so far as they are used for - (a) construction or execution of works contract of a building or a civil structure or a part thereof; or (b) laying of foundation or making of structures for support of capital goods, except for the provision of one or more of the specified services; or] [(B) [services provided by way of renting of a motor vehicle], in so far as they relate to a motor vehicle which is not a capital goods 6. As per Clause (B) of the definition of input service , only when the services provided by way of renting of a motor vehicle insofar as they relate to motor vehicle, which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice does not raise any allegation with regard to the category of motor vehicle / service provider, which is excluded as per clause (B), the disallowance of credit stating that the services fall within the exclusion clause is not correct. The appellant in page 42 of the appeal paper book has produced certificate issued by the service provider namely Sri Bhagyalakshmi enterprises (Staff Bus Operators), wherein it is stated that the vehicle rented out to the appellants are capital goods in their books of accounts. Similar declarations issued by other cab operators like KP Cabs, Raagav Tourist Service etc. are also furnished by appellant. These documents would go to show that the motor vehicles are capital goods for the service pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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