2013 (11) TMI 1066 - AT - Service Tax

CENVAT Credit - Whether the appellant, a manufacturer of lead and zinc and ingots, would be eligible for cenvat credit of service tax paid on the services of the man power supply for maintenance of lawn and green belt around the factory - Held that - cenvat credit cannot be denied by re-opening the assessment at the end of the buyer of the inputs without review of the assessment by the jurisdictional Central Excise Authorities/assessing authorities at the supplier s end - even if the duty has been paid in excess of the amount finally held to be payable, unless the excess duty paid has been refunded, the assessee could claim cenvat credit as the department could not get the duty twice - Following decision in assessee s own case in 2013 (11) TMI 407 - CESTAT NEW DELHI - Decided in favour of assessee.

Summary

Issues:
Eligibility for cenvat credit on service tax paid for man power supply for maintenance of lawn and green belt around the factory.

Analysis:
The judgment revolves around the eligibility of cenvat credit for a manufacturer of lead and zinc ingots on the service tax paid for man power supply for maintaining the lawn and green belt around the factory premises. The dispute arose when the department issued a show cause notice for recovery of cenvat credit along with interest and penalties, which was confirmed by the jurisdictional Asstt. Commissioner. The appellant appealed this decision to the Commissioner (Appeals) who rejected the appeal, leading to the current appeal before the Tribunal.

The appellant's counsel argued that the maintenance of lawns was necessary to comply with the directives of the Rajasthan State Pollution Control Board, without which manufacturing operations would not be allowed. The counsel contended that the service should be considered as used in or in relation to the manufacture of final products. The appellant relied on a previous Tribunal judgment to support their position.

On the other hand, the department's representative defended the impugned order, stating that horticulture services like lawn maintenance were not taxable services. The department argued that even if the service provider paid service tax, it should not be considered for cenvat credit as it lacked a nexus with the manufacture of final products.

After considering both arguments, the Tribunal judge rejected the department's contention that the service was not taxable and hence the service tax paid should not be admissible for cenvat credit. The judge cited precedents from the Apex Court and various High Courts to support the position that cenvat credit cannot be denied without a review of the assessment by the jurisdictional authorities at the supplier's end.

Ultimately, the Tribunal ruled in favor of the appellant, citing a previous judgment in the appellant's own case where the issue of eligibility for cenvat credit on a similar service had been decided in their favor. The impugned order was set aside, and the appeal was allowed in favor of the appellant.