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TMI Blog2017 (3) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... vides for the accommodation as well as other welfare activities like hospitals, schools etc. for the employees of the factory - following the judgment in the case of M/s. Reliance Industries Ltd.[2015 (11) TMI 100 - CESTAT MUMBAI], the respondent is eligible for credit - appeal dismissed - decided against Revenue. - E/2389/2010-SM - A/30049/2017 - Dated:- 12-1-2017 - Ms. Sulekha Beevi, C.S., Member (Judicial) Shri Guna Ranjan, Superintendent(AR) for the Appellant. Shri V. Raghuraman and Shri S. Bhanumurthy, Advocates for the Respondent. ORDER The above appeal is filed by the Department against the order passed by Commissioner(Appeals) who allowed the credit on service tax paid for services received by the respondent fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. On behalf the respondent, the learned counsel Shri V. Raghuraman assisted by Shri M. Bhanumurthy explained the necessity for providing residential accommodation for the employees of the factory. He submitted that the respondent company is engaged in manufacturing of cement and the factory is situated in remote area adjacent to the lime stone quarry. The mining activity in the limestone quarries is a continuous process wherein the employees have to reach the mine at all times including odd hours of the day. The township or the residential accommodation is provided to the employees within the factory premises which extends to almost 170 acres and there are no other residential accommodation available near the factory. It is contended by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viz. Maintenance of residential colony is eligible for credit. The Hon'ble High Court in the said judgment had observed that the staff colony provided by the respondent company being directly and intrinsically linked to its manufacturing activity credit could not be denied. That in the case of Reliance Industries Ltd. (supra), the co-ordinate Bench of the Tribunal has held that credit is admissible in respect of construction services of residential township which is provided for the employees. That similar view was taken in the case of Bajaj Hindustan Ltd. (supra). The learned counsel contended that the credit has been rightly allowed by the Commissioner(AppeaIs). 5 I have considered the rival submissions made before me. At the out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directly or indirectly connected with the manufacturing activity of the respondent-Company was therefore not borne out on facts. The staff colony, provided by the respondent-Company, being directly and intrinsically linked to its manufacturing activity could not therefore be excluded from consideration. Consequently, the services which were crucial for maintaining the staff colony, such as lawn mowing, garbage cleaning, maintenance of swimming pool, collection of household garbage, harvest cutting, weeding etc., necessarily had to be considered as input services falling within the ambit of Rule 2(l) of the Cenvat Rules, 2004. 6. The learned AR has countered this judgment by submitting that the credit has been allowed in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the factory township related expenses form a part of its cost of production as per CAS-4 and that it was accordingly eligible to avail credit of the tax paid. The submissions made by the appellant in their reply, reads as under : The fact that township related expenses are identically contended with the manufacture of goods is also recognized by the principles of costing. As per Costing Standards-4, all non-monetary benefits extended to factory employees are regarded either as direct wages and salaries or else work overheads/production overheads or administrative overheads relating to production activity and form part of the cost of manufacture of final products. This contention of the Appellant had not been rebutted nor disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nel will not available for operation of the manufacturing activity. 8.2 The reliance placed by the learned D.R. in the case of Manikgarh Cement (supra) needs to be addressed by us as the lower authorities have also relied upon the very same judgment to hold against the appellant herein. On perusal of the judgment of the Hon ble High Court of Bombay in the case of Manik-garh Cement (supra) we find that the judgment of the Hon ble High Court in the case of Coca Cola India Pvt. Ltd. (supra) was not cited before them. Be that as it may, we also find that in the narration of the facts as recorded by the Hon ble High Court there is nothing which indicates that the assessee s Counsel had urged an argument that the cost of setting up of reside ..... X X X X Extracts X X X X X X X X Extracts X X X X
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