2009 (6) TMI 205 - AT - Service Tax

CENVAT credit found to have been irregularly availed in respect of Landscaping Service and Cleaning Service - As regards the eligibility to credit of cleaning service the submissions by the appellants do not indicate as to where the impugned activity of rodent control and pest control was undertaken - Tribunal in Millipore India Ltd. v. Commissioner of Central Excise, Bangalore-II had held that the definition of input service was very broad and the argument that even landscaping service was in relation to manufacture of final product Hence, appellants have made out a prima facie case against the demand for credit relatable to landscaping service stay granted

Summary

Issues:
1. Application for waiver of pre-deposit and stay of recovery of CENVAT credit.
2. Eligibility of landscaping service and cleaning service as input services for CENVAT credit.

Analysis:
1. The judgment pertains to applications filed by two companies for waiver of pre-deposit and stay of recovery of CENVAT credit confirmed against them. The companies had paid service tax under 'Landscaping Service' and 'Cleaning Service' categories during specific periods. The appellants sought relief based on a precedent where landscaping service was considered an eligible input service.

2. The learned counsel for the appellants referenced a previous Tribunal decision to support the claim that landscaping service qualifies as an input service. However, there was ambiguity regarding the eligibility of cleaning service for credit, as the specific activities of rodent control and pest control were not clearly identified in the submissions made before the authorities or the Tribunal. The Tribunal considered the broad definition of 'input service' and the relation of landscaping service to the manufacturing process in a previous case.

3. After careful consideration, the Tribunal found that the appellants had established a prima facie case against the demand for credit related to landscaping service. The Tribunal cited the precedent where it was held that even landscaping service could be considered in relation to the manufacture of the final product. Consequently, the applications for waiver of pre-deposit of irregularly taken credit and the applicable interest were granted, and recovery was stayed pending the final decision in the appeal.

This judgment highlights the importance of establishing a clear connection between services availed and their role in the manufacturing process to claim CENVAT credit. The decision underscores the significance of precedents in determining the eligibility of services for tax credits and the need for precise documentation to support such claims.