2010 (3) TMI 375 - AT - Service Tax

Cenvat Credit- The appellants have filed this appeal against the order of denial of Cenvat credit on the input services viz. Insurance on company vehicles, tours & travels, factory garden maintenance and plant housekeeping services. The lower authority had denied Cenvat credit to the appellants on factory garden maintenance and plant housekeeping services observing that they are not related to in or in relation to the manufacture of final product and not falling under the definition of Input services and with regard to the insurance service and tours & travels they found that the appellant has failed to provide any records in respect of these service. Accordingly, credit was denied. Held that- No plant can run without proper maintenance of plant housekeeping services. Credit admissible. Further held that better atmosphere created by garden increasing work efficiency thus credit admissible. Further held that- documents relating to company vehicle tour and travel not provided thus the matter remanded to the adjudicating authority.

Summary

Issues: Denial of Cenvat credit on input services including insurance on company vehicles, tours & travels, factory garden maintenance, and plant housekeeping services.

In this judgment by the Appellate Tribunal CESTAT, Mumbai, the appellant appealed against the denial of Cenvat credit on various input services. The lower authority had denied credit on factory garden maintenance and plant housekeeping services, stating they were not related to the manufacture of the final product. Additionally, credit was denied for insurance services and tours & travels due to lack of supporting records. The appellant argued that previous tribunal decisions supported their claim for credit on garden maintenance and plant housekeeping services. They also requested a remand for insurance and travel services to provide necessary documents. The SDR contended that garden maintenance was not eligible for credit and distinguished the case of plant maintenance from housekeeping services. The tribunal examined the arguments presented by both parties.

Regarding insurance and travel services, the tribunal remanded the matter to the adjudicating authority for document verification. For garden maintenance, the tribunal referred to previous decisions highlighting the positive impact of a well-maintained garden on factory efficiency, ultimately allowing Cenvat credit for garden maintenance services. The tribunal disagreed with the SDR's interpretation of the law and upheld the credit for garden maintenance. In the case of plant housekeeping services, the tribunal emphasized the essential nature of such services for maintaining a productive manufacturing environment, allowing Cenvat credit based on previous decisions and observations. The tribunal also noted a previous order allowing input service credit for plant housekeeping charges. In conclusion, the tribunal allowed Cenvat credit for garden maintenance and plant housekeeping services, while remanding the issue of insurance and travel services back to the lower authorities for further examination.