2013 (1) TMI 615 - AT - Central Excise

CENVAT Credit on Service Tax paid in respect of gardening services - Held that - As decided in Millipore India Pvt. Ltd. case 2011 (4) TMI 1122 - KARNATAKA HIGH COURT Landscaping of factory or garden certainly would fall within the concept of modernization, renovation, repair, etc., of the office premises.That apart, now the concept of corporate social responsibility is also relevant. It is to discharge a statutory obligation, when the employer spends money to maintain their factory premises in an eco-friendly, manner, certainly, the tax paid on such services would form part of the costs of the final products. Gardening services are the services which are in relation to the activity conducted in the factory premises and hence are eligible to be availed as an input service - in favour of the assessee.

Summary

Issues: Appeal against Order-in-Appeal regarding CENVAT Credit on Service Tax paid for gardening services.

Analysis:
1. Representation Absence: Despite no representation from the respondents, the issue was considered due to its narrow scope.

2. CENVAT Credit Issue: The main issue revolved around the eligibility of CENVAT Credit on Service Tax paid for gardening services. The first appellate authority relied on the judgment of the Hon'ble High Court of Mumbai in a specific case to allow the credit. This judgment was further supported by a Tribunal ruling in the case of Millipore India Pvt. Ltd., which held that gardening services related to activities conducted in factory premises qualify as input services.

3. High Court Ruling: The Revenue challenged the Tribunal's decision in the Hon'ble High Court of Karnataka, which elaborated on the broad definition of input services. The court emphasized that activities related to business and services rendered in connection with it fall under input services. The court highlighted the importance of maintaining factory premises for credit rating, environmental compliance, and corporate social responsibility. Consequently, the court upheld the Tribunal's decision, stating that the service tax paid on such services constitutes part of the costs of final products, entitling the assessee to the benefit of CENVAT Credit.

4. Judgment Outcome: As the issue had already been settled in favor of the assessee by the High Court, the appeal by the Revenue was deemed meritless and subsequently rejected. The judgment confirmed the entitlement of the assessee to the CENVAT Credit on Service Tax paid for gardening services, in line with the broader concept of input services and the maintenance of factory premises.

This detailed analysis of the judgment highlights the progression of the case, the legal interpretations made at different levels, and the final outcome in favor of the assessee regarding the eligibility of CENVAT Credit for specific services.