2015 (8) TMI 1324 - AT - Central Excise

Cenvat credit on input service in respect of medical services including remuneration paid to Doctors, Nursing Staff and also the cost of medicines by the appellant - denial of claim on the ground that said services have no nexus with the manufacture of final product - Held that - Providing the medical facility to the employees working in the factory is a statutory requirement under the Factories Act as well as the Mines Act. Thus, service tax paid for the manpower supply service for providing the doctors and nursing staff, should be available as Cenvat credit to the appellant, in view of the decision of this Tribunal in the case of the appellant itself, reported (2014 (10) TMI 90 - CESTAT NEW DELHI ). - Decided in favour of assessee

Summary

Issues: Denial of Cenvat credit on input services related to medical services and manpower supply for doctors and nursing staff.

In this case, the appellant appealed against the order denying Cenvat credit on input services, including medical services and remuneration paid to doctors, nursing staff, and the cost of medicines. The appellant argued that the services were essential for maintaining medical facilities as mandated by the Factories Act and Mines Act. The appellant relied on a previous Tribunal decision to support their claim. On the other hand, the respondent reiterated the findings of the impugned order and cited a different Tribunal decision to justify the denial of Cenvat credit. The Tribunal, after hearing both sides, analyzed the statutory requirement of providing medical facilities to employees under the Factories Act and Mines Act. The Tribunal concluded that service tax paid for manpower supply services for doctors and nursing staff should be eligible for Cenvat credit based on the statutory mandates. The Tribunal distinguished the cited case by the Revenue, stating that it was not relevant to the present situation. Consequently, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant.

This judgment highlights the importance of statutory compliance in determining the eligibility of Cenvat credit on input services related to medical facilities. The Tribunal emphasized that services required by law for maintaining medical facilities for employees should be considered as services used in or in relation to the manufacture of final products. The decision underscores the significance of statutory mandates in justifying the availment of Cenvat credit and distinguishes cases where such mandates are not applicable. Ultimately, the Tribunal ruled in favor of the appellant, emphasizing the statutory obligation to provide medical facilities to employees as a basis for allowing Cenvat credit on the input services in question.