2018 (5) TMI 1047 - AT - Central Excise

CENVAT credit - input services - rent-a-cab service - insurance service - waste management service - Held that - As regards rent-a-cab service , it is undisputed that the services were utilised for picking and dropping of the employees from the nearest railway station to the manufacturing factory - credit cannot be denied. Insurance service - Held that - it is undisputed that the insurance is in respect of factory premises and plant machinery - similar issue decided in the case of Commissioner of Central Excise, Delhi -III v. Suzuki Motorcycle India Pvt Ltd 2016 (9) TMI 576 - CESTAT CHANDIGARH wherein the bench has held that such credit of service tax is eligible to be availed by the manufacturer - credit allowed. Waste management/disposal service - Held that - there is no reason to disallow such credit to the appellant herein as the provisions of the Environment Act if not met then the factory would be closed down - credit allowed. Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
Eligibility to avail CENVAT credit of service tax paid on 'rent-a-cab service', 'insurance service', and 'waste management service' during May 2011 to March 2015.

Analysis:
The appeal was directed against an Order-in-Appeal dated 15/09/2017 passed by the Commissioner of GST & Central Excise (Appeal-Thane), Mumbai. The issue involved the eligibility to avail CENVAT credit of service tax paid on specific services. The Revenue contended that these services did not fall under the definition of 'input service' under rule 2(l) of CENVAT Credit Rules, 2004. However, the appellant argued that these services were essential for their manufacturing activity and should be eligible for credit. The services in question were 'rent-a-cab service' for employee transportation, 'insurance service' for factory and machinery, and 'waste management service' for disposal of factory waste as mandated by the Pollution Control Board.

Upon careful consideration, the Member (Judicial) found that the issue was well-established through various decisions. Regarding 'rent-a-cab service', it was noted that similar cases had been decided in favor of the taxpayer by different benches, such as the Pune bench, Ahmadabad bench, and Delhi bench. The Member saw no reason to deviate from the precedent set in those cases.

Concerning 'insurance service', it was established that the insurance was indeed for the factory premises and plant machinery. Previous tribunal cases supported the eligibility of such service tax credit for manufacturers. The Member, therefore, upheld the eligibility of the appellant to avail credit for 'insurance service'.

Regarding 'waste management/disposal service', it was acknowledged that the services were essential for treating and disposing of waste generated during manufacturing activities. The services were in compliance with the guidelines of the Maharashtra Pollution Control Board, and failure to adhere to these regulations could result in factory closure. Precedent cases supported the eligibility of such service tax credit, and the Member saw no reason to disallow the credit to the appellant.

Conclusively, the impugned order was set aside, and the appeal was allowed in favor of the appellant. The judgment highlighted the importance of adhering to legal guidelines and regulations in availing CENVAT credit for essential services related to manufacturing activities.