2018 (11) TMI 1368 - AT - Central Excise

CENVAT Credit - inputs services - service tax paid on telephone bills which was in the name of their President - Manpower Supply utilized for staff canteen - Held that - This Bench of the Tribunal in the case of M/s. IP Rings Ltd. Vs. Commissioner of Central Tax, GST & CE, Chennai Outer 2018 (9) TMI 898 - CESTAT CHENNAI wherein, Manpower Supply Services used for housekeeping and canteen being integrally connected to the manufacturing activity, were held to be eligible input services. There being no change with regard to facts the above ruling squarely applies to this case vis- -vis the present case on hand. Moreover, the Revenue was unable to produce any Orders/judgements contrary to or distinguishing the above Order of this Bench - appeal allowed - decided in favor of appellant.

Summary

Issues: Availment of input service credit on telephone bills in the name of President, input service credit on Manpower Supply for staff canteen, disallowance of credit on canteen services, imposition of penalties.

Analysis:
1. The appellant, engaged in paper manufacturing, availed CENVAT Credit of duty paid on inputs, input services, and capital goods. The lower adjudicating authority disallowed input service tax credit on telephone bills in the name of their President and Manpower Supply for the staff canteen. Penalties and interest on wrongly availed credit were imposed.

2. An appeal was made to the Commissioner of G.S.T. & Central Excise (Appeals), who allowed input service credit of &8377; 4210 and modified the Order-in-Original partially. The appellant challenged the disallowance of credit on canteen services and penalties.

3. During the hearing, the appellant's advocate referred to a Tribunal decision in M/s. IP Rings Ltd. case, where Manpower Supply Services for housekeeping and canteen were considered eligible input services integral to manufacturing activities. The Revenue opposed this view.

4. The Tribunal, considering the M/s. IP Rings Ltd. case, ruled that services like housekeeping and canteen, essential for maintaining cleanliness and hygiene in factory premises, qualify as eligible input services. The impugned order disallowing credit was set aside, following the precedent.

5. As there were no distinguishing judgments presented by the Revenue, the Tribunal found the impugned order unsustainable and allowed the appeal with consequential benefits as per law. The decision was pronounced in open court, granting relief to the appellant.