2013 (8) TMI 97 - AT - Central Excise

Cenvat Credit for input services - Outdoor catering service for providing canteen facilities to the employees, manpower supply service for gardening and land scaping for compliance with the directions of Pollution Control authorities, cleaning service for keeping the factory neat and clean and rent a cab service for provide transport facility to the employees for bringing them to the factory and dropping them back at their homes Held that - Outdoor catering has been availed for providing canteen facility to the workers which is necessary for compliance with the provisions of Section 46 of the Factories Act - Gardening and land scaping service, the same is required for maintaining green belt which is the requirement of pollution control laws - Service of cleaning, the same had been availed for keeping the factory neat and clean and dust free, which is also the statutory requirement of Section 7A and Section 11 to 16 of the Factories Act, 1956 - service of rent a cab availed for bringing the workers to the factory and dropping them home, this issue also stands decided in favour of the appellant by the judgments of Hon ble Punjab & Haryana High Court and Karnataka High Court in the case of CCE, Chandigarh II vs. Federal Mogul Goetze (India) Ltd. reported in 2011 (9) TMI 120 - PUNJAB AND HARYANA HIGH COURT - Availment of these services has to be treated as services availed in or in relation to manufacture of the finished product Decided in favor of Assessee.

Summary

Issues:
Whether the appellant is eligible for Cenvat credit on various services provided for employees during a specific period.

Analysis:
The appellant, a manufacturer of auto parts, claimed Cenvat credit for services like outdoor catering, manpower supply, cleaning, and rent a cab for employees during a particular period. The department issued show cause notices challenging the eligibility of these services as 'input services.' The Joint Commissioner confirmed the demand for Cenvat credit, along with penalties. The Commissioner (Appeals) upheld this decision, leading to the appellant filing an appeal.

The appellant argued that the services were essential for compliance with statutory requirements under the Factories Act and pollution control norms. They contended that these services were directly related to the manufacturing process, citing previous judgments supporting their claim. The Departmental Representative defended the impugned order based on the findings of the Commissioner (Appeals).

The Tribunal analyzed each service individually. It acknowledged that services like outdoor catering, gardening, cleaning, and transportation were necessary for statutory compliance and maintaining a conducive working environment. The Tribunal referred to various judgments supporting the eligibility of such services for Cenvat credit. Consequently, the Tribunal concluded that the denial of Cenvat credit for these services was not sustainable.

Regarding the service of rent a cab for employee transportation, the Tribunal referenced judgments from the Punjab & Haryana High Court and Karnataka High Court, which favored the appellant's position. Consequently, the Tribunal found the Commissioner (Appeals)'s decision on this issue unsustainable.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal in favor of the appellant. The judgment highlighted the essential nature of the services in relation to manufacturing activities and statutory compliance, emphasizing their eligibility for Cenvat credit based on established legal precedents.