2015 (10) TMI 2200 - AT - Central Excise

Denial of CENVAT Credit - whether CENVAT credit of services of Para medical staff availed by the appellant for providing medical facilities to its employees in the factory is admissible or not, when such services are required to be provided statutorily under the Factories Act, 1948 - Held that - The ratio laid down by the relied upon case laws 2015 (10) TMI 1693 - CESTAT AHMEDABAD and 2011 (4) TMI 1122 - KARNATAKA HIGH COURT support the view that Cenvat Credit with respect to medical facilities provided statutorily under the Factories Act 1948 will be admissible - Decided in favour of assessee.

Summary

Issues:
Admissibility of CENVAT credit for service tax paid on man power supply for Para medical staff under the Factories Act, 1948.

Issue Analysis:

1. Admissibility of CENVAT Credit:
The appellant appealed against the rejection of CENVAT credit for service tax paid on man power supply for Para medical staff under the Factories Act, 1948. The advocate argued that the issue in both orders was different and should be decided separately. It was contended that the services of Para medical staff used in places other than the factory had been reversed along with interest. However, for services availed in the factory premises, it was argued that they were a statutory requirement under the Factories Act, 1948. The appellant relied on a previous order by the bench in a similar case to support the admissibility of the service tax credit. The Revenue defended the order passed by the first appellate authority.

2. Legal Precedents and Interpretation:
The Tribunal examined the issue of admissibility of CENVAT credit for services of Para medical staff provided statutorily under the Factories Act, 1948. The Revenue argued that services of Male Nurses for employee welfare lacked nexus to manufacturing activity, especially when provided in residential staff colonies. However, the Tribunal found the Revenue's evidence lacking, as no documentary proof indicated services were solely provided in residential colonies. The Tribunal emphasized the statutory obligation under the Factories Act to maintain medical facilities, indicating a clear relation to manufacturing. Legal precedents were cited, including cases related to Pollution Control Activities and Canteen Services, where courts upheld the admissibility of CENVAT credit for statutory services. The Tribunal concluded that CENVAT credit for medical facilities provided under the Factories Act was admissible, aligning with the principles established in previous case laws.

3. Decision and Rationale:
Based on the analysis of legal precedents and the statutory requirement under the Factories Act, the Tribunal allowed the appeal filed by the appellant. The decision was supported by the case laws referenced during the proceedings, which established the admissibility of CENVAT credit for services mandated by statutory provisions. The Tribunal's decision highlighted the importance of maintaining medical facilities as per statutory requirements, emphasizing the relevance of such services to the manufacturing process. Consequently, the appeal was allowed, affirming the admissibility of CENVAT credit for services of Para medical staff provided under the Factories Act, 1948.

This comprehensive analysis of the judgment highlights the issues, legal interpretations, precedents, and the final decision rendered by the Appellate Tribunal CESTAT AHMEDABAD regarding the admissibility of CENVAT credit for services of Para medical staff under the Factories Act, 1948.