2016 (9) TMI 576 - AT - Central Excise

Cenvat credit - insurance service, gardening service, network detective service, manpower service, export service, repair & maintenance service and software service prior to 01.04.2011 - Held that - as the assessee has availed all these services in the course of their business of manufacturing of excisable goods, it is entitled to avail cenvat credit all these services for the period prior to 01.04.2011 in the light of the decision of Hon ble High Court of Bombay in the case of Ultratech Cement Pvt. Ltd. 2010 (10) TMI 13 - BOMBAY HIGH COURT . Cenvat credit - services namely insurance service, gardening service and network detective service after 01.04.2011 - Held that - it is found that insurance service has been availed by the assessee of medical insurance of their employees which they are statutory required to availed in the light of employee State Insurance Act which provides that the assessee is compulsory required to take insurance of the employee, therefore, I hold that the said service is integrally part of the manufacturing activity and they are entitled to avail the cenvat credit on the said services in the light of the decision of this Tribunal in the case of Hindustan Coca cola Beverages Pvt. Ltd. 2015 (10) TMI 2463 (CESTAT- New Delhi) . With regard to public liability insurance, it is found that without taking the said insurance the assessee cannot run their factory. In fact the said insurance is for public to provide cover from any environment harms and without the same, the assessee can t run factory. In these circumstances, I hold that the assessee is entitled to avail cenvat credit. Further, it is found that the insurance service has been availed by the asseessee for the transportation of goods beyond their factory. It is the contention of the appellant that although they have taken cenvat credit on these services but they have paid service tax on insurance charges and recovered from their dealer on which they are entitled to take cenvat credit as per rule 2(I) of the Cenvat Credit Rules, 2004. I do agree with that and allow the cenvat credit. With regard to gardening maintenance service, assessee is entitled to avail such service in the light of the decision of Tribunal in the case of Lifelong Meditech Ltd. 2016 (7) TMI 468 - CESTAT CHANDIGARH . With regard to network detective service, it is found that the said service has been availed by the assessee for verification of credentials of their employees before employing them to work which is essential to run the factory, therefore, I hold that the assessee is entitled to take cenvat credit on these services. - Decided against the Revenue

Summary

Issues:
Whether the assessee is entitled to avail cenvat credit on various services before and after 01.04.2011.

Analysis:
The issue in this case revolves around the entitlement of the assessee to avail cenvat credit on different services utilized in the manufacturing process. For the period before 01.04.2011, the assessee's entitlement to cenvat credit on services like insurance, gardening, network detective, manpower, export, repair & maintenance, and software services is established based on the decision of the Hon’ble High Court of Bombay in a specific case. This entitlement is upheld due to the undisputed use of these services in the manufacturing of excisable goods.

Regarding services post 01.04.2011, the entitlement to cenvat credit on insurance services is supported by the fact that the insurance was for medical coverage of employees as mandated by the Employee State Insurance Act. This service is deemed integral to the manufacturing activity, allowing the assessee to claim cenvat credit. The decision of the Tribunal in a case involving Hindustan Coca-Cola Beverages Pvt. Ltd. further supports this stance by emphasizing the eligibility of services used for business activities and not primarily for personal employee use.

The judgment also addresses the issue of public liability insurance, highlighting its necessity for factory operations and the entitlement of the assessee to claim cenvat credit on such services. Additionally, the assessee's claim for cenvat credit on transportation-related insurance charges is allowed, considering the recovery of service tax from dealers and compliance with Cenvat Credit Rules, 2004.

In the context of gardening maintenance services, the Tribunal's observation in a specific case establishes the direct relation of horticulture services to manufacturing activities, making the assessee eligible for cenvat credit on such services. Similarly, for network detective services utilized for employee verification, the necessity of these services for factory operations justifies the assessee's entitlement to claim cenvat credit.

Ultimately, the judgment concludes that the assessee is entitled to avail cenvat credit on the mentioned services, leading to the allowance of appeals filed by the assessee and the dismissal of the appeal filed by the revenue. The decision is based on the established use of services in manufacturing activities and compliance with relevant legal provisions and precedents.