2010 (6) TMI 315 - AT - Service Tax

Credit of service tax paid on services - interior decorator as garden developer and on man power supplier received for gardening activity - show cause notice deny the same on the ground that the same are not covered by the definition of input service - Held that - Similarly, the Tribunal in the case of M/s. Millipore India referred supra has clearly held that even land scaping surrounding the factory has to be considered as input service. Revenue has not doubted the applicability of Tribunal s decision in the case of M/s. Millipore India, but has simply stated that the said decision does not stand accepted by the Revenue and an appeal their against has been filed before Hon ble High Court of Karnataka - no stay of operation of Tribunal s decision in the case of M/s Millipore India. It is well settled that mere filing appeal by itself, is not a ground for non-following of the earlier decision - appeal filed by the Revenue is rejected

Summary

Issues:
1. Dispute over availing credit of service tax on services of interior decorator and man power supplier for gardening activity.
2. Interpretation of "input service" under the law.
3. Applicability of Tribunal's decisions in similar cases.
4. Compliance with Pollution Control norms for gardening activities in a chemical factory.

Analysis:
1. The appeal by the Revenue involved a dispute regarding the availing of service tax credit on services of an interior decorator and a man power supplier for gardening activity. The Revenue sought to deny the credit, arguing that these services did not fall under the definition of "input service."

2. The Commissioner (Appeals) allowed the appeal, citing precedents from the Tribunal in other cases. The Commissioner relied on the Tribunal's decisions in the cases of CCE, Mumbai v. GTC Industries Ltd. and M/s. Millipore India Ltd. v. CCE, Bangalore, which established that landscaping around a factory could be considered an input service. The Tribunal held that maintaining a garden was mandatory under pollution control norms, making it an essential input service for the factory.

3. The Revenue did not contest the applicability of the Tribunal's decisions in the cases referenced by the Commissioner (Appeals). The Tribunal's decision in the case of GTC Industries held that canteen services were eligible for Cenvat Credit, while the decision in the case of M/s. Millipore India expanded the definition of input service to include landscaping around the factory. Despite the Revenue's appeal to the High Court, the Tribunal found no reason to deviate from its earlier decisions.

4. The Tribunal noted that the Pollution Control Board's consent order required the utilization of treated effluent for gardening and plantation within the factory premises. The Commissioner (Appeals) emphasized that maintaining a garden was a mandatory activity under pollution control regulations, and without a garden, manufacturing activities could not be permitted. Therefore, the maintenance of the garden was considered an essential input service under the law.

In conclusion, the Tribunal rejected the Revenue's appeal, upholding the Commissioner (Appeals)'s decision based on the precedents set by the Tribunal in similar cases and the mandatory nature of maintaining a garden under pollution control regulations for a chemical factory.