2015 (4) TMI 363 - AT - Service Tax

Denial of CENVAT Credit - Gardening and House Keeping Services - whether the appellant is eligible for availing input service credit on gardening and house-keeping services, which was disallowed by the Commissioner (Appeals) in the impugned order - Held that - appellant is a manufacturer of shampoo and manufacturing cold cream registered with central excise. As seen from the Pollution Control License Order dated 2012.2004 (sic) and Schedule-M of the Drug Control Act, it is mandatory for the appellant to maintain green cover and also should use the effluent treated water and keep the factory premises clean. Therefore, as per the statutory requirement, the appellant is required to maintain gardening and green cover and plants and cleanliness of the manufacturing premises. The case law relied upon by the appellant in the case of Murugappa Morgan Thermal Ceramics Ltd. (2013 (4) TMI 384 - CESTAT AHMEDABAD), applicable to the present case. The Tribunal rightly held that the services used for maintaining the garden will be admissible as it is required to maintain green cover as per law. Whereas, the case law relied upon by the Ld. AR M/s. Tyco Sanmar and M/s. Xomax Sanmar (2010 (8) TMI 711 - CESTAT, Chennai) wherein the issue relates to the cenvat credit on landscaping services and the same is not applicable to the facts of the present case. I hold that the appellant is eligible for credit on gardening and house-keeping services - Decided in favour of assessee.

Summary

Issues:
- Disallowance of cenvat credit on gardening and house-keeping services
- Eligibility of input service credit for gardening and house-keeping services

Analysis:
The case involved a dispute regarding the disallowance of cenvat credit amounting to Rs. 97,391 on gardening and house-keeping services by the adjudicating authority. The Commissioner (Appeals) partially allowed the appeal, permitting input service credit on certain services related to production but disallowing credit on gardening and house-keeping services. The appellant, a manufacturer of shampoo and cold cream, argued that maintaining green cover in their factory area was essential as per statutory requirements, justifying the eligibility for input service credit. The appellant cited relevant laws and relied on case laws to support their claim.

The Revenue, represented by the Ld. AR, contended that gardening is not an input service for the manufacture of excisable goods, referencing a Tribunal Order disallowing credit on similar services. The Tribunal analyzed the submissions from both sides and focused on determining the eligibility of the appellant for availing input service credit on gardening and house-keeping services. It noted the statutory requirement for the appellant to maintain green cover and cleanliness in their manufacturing premises, as mandated by Pollution Control and Drug Control Acts. The Tribunal found the appellant's argument supported by the case law cited, which emphasized the necessity of maintaining green cover for compliance with the law.

In contrast, the case law cited by the Revenue was deemed inapplicable to the present situation. The Tribunal concluded that the appellant met the criteria for availing credit on gardening and house-keeping services, as these activities were essential for complying with statutory obligations. Consequently, the appeal was allowed, and the stay petition was disposed of in favor of the appellant. The judgment highlighted the importance of statutory compliance and the relevance of input service credit in specific manufacturing contexts.