2011 (7) TMI 412 - AT - Service Tax

Cenvat credit - man power supply service availed for garden maintenance work on the ground - definition of input service as per CENVAT Credit Rules 2004 - held that - decision of the Tribunal in Brakes India Ltd. Vs CCE Mysore 2010 -TMI - 77209 - CESTAT BANGALORE holding that the man power services used for garden maintenance is required as infrastructure for manufacture and clearance of final products is applicable - Cenvat Credit allowed.

Summary

Issues:
Credit disallowed on man power supply service for garden maintenance work; eligibility of input service for CENVAT credit; applicability of Section 11AC penalty.

Analysis:
The case involves the disallowance of credit amounting to Rs.13,966 on man power supply service used for garden maintenance work, contending that it does not qualify as an eligible input service for claiming CENVAT credit under the CENVAT Credit Rules, 2004. The issue also includes the imposition of interest and penalty under Section 11AC of the Central Excise Act, 1944.

Upon hearing both parties, it was noted that the assessees were granted consent by the Tamil Nadu Pollution Control Board to manufacture goods, subject to the condition of gardening within the plant premises. This condition mandated the plantation of specific tree varieties at a specified density per acre of land, as per the Factories Act, 1948. The consent order was periodically renewed, indicating its crucial role in allowing the manufacturing activities to continue. The Tribunal referred to a previous decision in Brakes India Ltd. Vs CCE Mysore [2010 (19) STR 424], which established that man power services for garden maintenance are essential infrastructure for manufacturing and clearance of final products, making them eligible for credit. This precedent was further supported by the decision in CCE Hyderabad Vs Voith Turbo Pvt. Ltd.(2011 (21) STR 52). Consequently, the Tribunal found a direct nexus between the garden maintenance service and the manufacturing business of the assessees, leading to the allowance of the appeal and setting aside the impugned order.

In conclusion, the Tribunal ruled in favor of the appellants, emphasizing the integral role of garden maintenance services in facilitating the manufacturing process and the clearance of final products. The decision was based on established legal precedents and the specific requirements imposed by the Tamil Nadu Pollution Control Board, ultimately allowing the credit and overturning the disallowance along with associated penalties.