2018 (2) TMI 1173 - AT - Central Excise

CENVAT credit - outdoor canteen service - bus and car hire service - garden service - period involved is December 2010 to August 2011, March 2013 to September 2014 - Held that - the issue is covered squarely in favor of the appellant herein as followed by the Tribunal in the case of Hindustan Coca Cola Beverages Ltd. 2016 (8) TMI 35 - CESTAT HYDERABAD - CENVAT credit availed on canteen services, bus and car hire services for the period in question in all these appeals seems to be correct. Garden maintenance service - Held that - issue is now settled by the Hon ble Karnataka High Court in the case of Millipore India Pvt. Ltd. 2011 (4) TMI 1122 - KARNATAKA HIGH COURT - credit allowed. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Availment of CENVAT credit on service tax paid for outdoor canteen service, bus and car hire service, and garden service.
- Interpretation of the definition of 'input service' under Rule 2(l) of CENVAT Credit Rules.
- Application of previous Tribunal and High Court decisions on similar issues.
- Sustainability of the orders passed by the Revenue authorities.

Analysis:
1. Availment of CENVAT Credit: The issue revolved around the appellant's denial of CENVAT credit for service tax paid on outdoor canteen service, bus and car hire service, and garden service. The Revenue authorities raised a demand, contending that these services were not used in the manufacturing activity. The first appellate authority allowed CENVAT credit for services utilized before 02/04/2011 but denied it for the period post this date due to a change in the definition of 'input service' under Rule 2(l) of CENVAT Credit Rules.

2. Interpretation of 'Input Service' Definition: The appellant cited the Division Bench's decision in Reliance Industries Ltd. v. Commissioner of Service Tax, which allowed CENVAT credit for similar services even post 02/04/2011. The Tribunal also followed this decision in the case of Hindustan Coca Cola Beverages Pvt. Ltd. The appellant argued that the services in question were eligible for CENVAT credit based on these precedents.

3. Application of Previous Decisions: The appellant further referenced the case of Commissioner of Central Excise, Bangalore - II v. Millipore India Pvt. Ltd., where the Hon'ble High Court of Karnataka allowed CENVAT credit for service tax paid on garden maintenance service. The Tribunal had also upheld this decision in the case of Life Long Meditech Ltd v. Commissioner of Central Excise & Service Tax. These precedents supported the appellant's argument for availing CENVAT credit on garden maintenance service.

4. Sustainability of Orders: After considering the submissions from both sides, the Member (Judicial) found the impugned orders unsustainable for multiple reasons. Referring to the Tribunal's detailed judgment in the Reliance Industries case, it was noted that the issue of availing CENVAT credit post 02/04/2011 on similar input services had been addressed. The Member held that the appellant was entitled to CENVAT credit on canteen services, bus and car hire services for the period in question, as supported by the Tribunal's decision in the Hindustan Coca Cola Beverages case. Consequently, the impugned orders were set aside, and the appeals were allowed.