2017 (1) TMI 366 - AT - Central Excise

Denial of CENVAT credit - house keeping service - rent a cab service - outdoor catering service - design service - advertising service - gardening services - Held that - I find that under the provisions of Section 11 of the Factories Act a manufacturer is required to maintain the factory neat and clean. As such, services availed by the appellant for keeping the factory neat and clean is a service essential for manufacturing operations and, hence, the same would be covered by the definition of input service. As regards rent a cab service, I find that the cenvat credit in respect of the same is admissible in view of the judgement of Hon ble Karnataka High Court in the case of Stanzen Toyotetsu India (P) Ltd. 2011 (4) TMI 201 - KARNATAKA HIGH COURT . As regards outdoor catering service, the same has been availed for providing canteen facility to the workers in the factory and in respect of the same Hon ble Bombay High Court in the case of CCE, Nagpur vs. Ultratech Cement 2010 (10) TMI 13 - BOMBAY HIGH COURT has held that the cenvat credit would be admissible. The design and advertising service are also covered by the definition of Input Service. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Eligibility for cenvat credit of various services under central excise duty.

Analysis:
The case involved a dispute regarding the eligibility of a manufacturer of structural steel items to avail cenvat credit for service tax paid on housekeeping service, rent a cab service, outdoor catering service, manpower recruitment, design service, advertising service, and gardening services. The department had denied the cenvat credit, leading to appeals being filed against the orders upholding the denial by the Assistant Commissioner and Supdt. Central Excise. The main arguments put forth included the essential nature of housekeeping services for maintaining a clean factory as mandated by the Factories Act, the provision of outdoor catering services for canteen facilities for workers, and the use of design and advertising services in relation to manufacturing operations. The appellant contended that previous judgments supported the admissibility of cenvat credit for these services.

During the hearing, the Advocate for the Appellant argued that the disputed services were essential for compliance with the Factories Act and manufacturing operations, citing relevant court judgments to support their case. On the other hand, the Departmental Representative did not contest the matter further and left the decision to the bench based on precedent decisions. Upon considering the submissions and records, the Member (Judicial) found that the services in question, including housekeeping, rent a cab, outdoor catering, design, and advertising services, were all essential for manufacturing operations and compliance with legal requirements. Referring to specific court judgments, the Member held that cenvat credit for these services was admissible. Consequently, the impugned order denying the cenvat credit was set aside, and the appeal was allowed with consequential relief.

In conclusion, the judgment clarified the eligibility of the appellant to avail cenvat credit for various services under central excise duty, emphasizing the essential nature of these services for manufacturing operations and compliance with legal requirements. The decision was based on the interpretation of relevant legal provisions and supported by precedent court judgments, ultimately allowing the appeal and providing relief to the appellant.