2012 (6) TMI 748 - AT - Central Excise

CENVAT Credit - Held that - landscaping of factory garden will fall within the concept of modernisation, renovation, repair etc. of office premises. Further, the credit rating of industry is dependent on how the factory is maintained inside and outside the premises and environmental law expects employer to keep factory without contravention thereof and the concept of social responsibility and statutory obligation of employer to maintain their factory in eco-friendly manner is also relevant. Therefore, these services are activities relating to business of manufacturer of excisable goods and held that the assessee is entitled to take credit of service tax paid on such services - Following decision of Commissioner of Central Excise, Bangalore vs. Millipore India Pvt. Limited 2011 (4) TMI 1122 - KARNATAKA HIGH COURT - Decided against Revenue.

Summary

Issues:
Admissibility of cenvat credit on service tax for landscaping services.

Analysis:
The judgment pertains to the admissibility of cenvat credit on service tax for landscaping services availed by the respondent. The audit revealed that the respondent had claimed cenvat credit amounting to Rs. 3,75,008/- for services between August 2005 to August 2009. Subsequently, proceedings were initiated challenging the admissibility of such credit, leading to the confirmation of demand along with interest and penalty. The Commissioner (Appeals) later set aside the original order, prompting the Revenue to file an appeal against this decision.

Upon deliberation, the judge noted that the issue at hand aligns with a recent judgment by the Hon'ble High Court of Karnataka in the case of Commissioner of Central Excise, Bangalore vs. Millipore India Pvt. Limited. The High Court's decision established that landscaping of factory gardens falls under the umbrella of modernization, renovation, and repair of office premises. Moreover, the High Court emphasized the significance of maintaining factory premises for credit rating, compliance with environmental laws, social responsibility, and statutory obligations. Consequently, the High Court concluded that such services are integral to the business activities of a manufacturer of excisable goods, thereby entitling the assessee to claim credit for service tax paid on these services.

Given the direct applicability of the High Court's ruling to the present case, the judge dismissed the Revenue's appeal, affirming the admissibility of cenvat credit on service tax for landscaping services. The judgment was dictated and pronounced in court, bringing the matter to a close.