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June 2011

(2011) 22 STR 126 (Tri.-Bang.) — CCEx., Visakhapatnam v. Andhra Pradesh Paper Mills Ltd.

By Puloma Dalal
Jayesh Gogri
Chartered Accountants
Reading Time 1 mins
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Cenvat credit of service tax paid on rent-a-cab service, telephone service and professional service of Chartered Accountant is admissible.

Facts:
The respondents had availed credit of Service tax paid on rent-a-cab service which was used by officials of the company for timely completion of their jobs, telephone service as landline phones were installed at residences of officials and bills were paid by the respondents, and professional service of Chartered Accountant which was directly related to the business of the respondents.

The Revenue was in appeal against allowance of credit on above-mentioned service as it contended that conveyance offered to officials was for their personal comfort and welfare purpose which was in no way connected to the respondent’s business activity.

Held:
By relying on various judgments, issue regarding eligibility of Cenvat credit on rent-a-cab service, telephone service and professional service of Chartered Accountant was settled in favour of the respondents as the services were connected with their business activity and accordingly the Revenue’s appeal was rejected.

Comment:
With the recent changes in the CENVAT Credit Rules, taking credit on such items could be a challenge.

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CRISIS

(2011) 22 STR 203 (Tri.-Delhi) CCEx, Ludhiana v. Deluxe Enterprises.