2013 (7) TMI 46 - AT - Service Tax

CENVAT credit Rule 2(l) of Cenvat credit rules - Input Services development and maintenance of garden - manpower engaged for maintaining the landscape around the factory premises - construction of compound wall - Held that - services in relation to development and maintenance of garden around the factory premises has to be eligible for availing cenvat credit to fulfill a statutory condition of controlling environmental pollution. Similarly, manpower engaged for maintaining such landscape will also be eligible as input credit services. - Decision in 2010 (6) TMI 315 - CESTAT, AHMEDABAD followed. Services used in construction of wall - Held that - During the relevant period, construction services utilized for establishing the factory were eligible for cenvat credit. A compound wall around the factory is essential to demarcate the registered factory premises and also to save the manufactured goods from pilferage and potential clandestine removal. Such a compound wall has to be considered as essential element for the completion of factory and an activity in relation to manufacture of excisable good. - services utilized for construction will be eligible for cenvat credit - as decided in CCE, Pune-II vs. Raymond Zambaiti Pvt. Ltd. (2008 (8) TMI 777 - COMMISSIONER OF CENTRAL EXCISE (APPEALS), PUNE-II) Decided in favor of assessee.

Summary

Issues:
Admissibility of cenvat credit on Pest Control services, man-power supply services for maintaining a garden, and credit on construction services for the compound wall of the factory.

Analysis:
The appellant appealed against the rejection of cenvat credit in OIA NO.PJ/516/VDR-I/2012-13. The primary issue was the admissibility of cenvat credit on various services. The appellant argued that they were required by a government permission to develop 33% of the factory area to mitigate emissions, necessitating services for garden maintenance and man-power supply. They cited relevant case laws to support their claim. On the other hand, the A.R. contended that the credit rejection was justified.

Upon hearing both sides and examining the records, the Tribunal found that the appellant was indeed obligated to maintain green cover around the factory premises to control environmental pollution. Therefore, services related to garden development and maintenance, as well as manpower supply for such purposes, were deemed eligible for cenvat credit. This decision was supported by a previous case law.

Regarding the admissibility of cenvat credit on construction services for the compound wall, the Tribunal noted that during the relevant period, such services were eligible for credit as they were essential for demarcating the factory premises and protecting goods. The construction of a compound wall was deemed crucial for the manufacturing process, making services for its construction eligible for cenvat credit under Rule-2(l) of the Cenvat Credit Rules. This view was further reinforced by a judgment from a different case.

Consequently, based on the observations made, the appeal filed by the appellant was allowed, and the Tribunal pronounced the operative portion of the order in court.