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TMI Blog2024 (8) TMI 656X X X X Extracts X X X X X X X X Extracts X X X X ..... used giving it the widest amplitude. The Hon ble apex Court in the case of GOOD YEAR INDIA LIMITED VERSUS COLLECTOR OF CUSTOMS, BOMBAY [ 1997 (9) TMI 100 - SUPREME COURT] , had held that the expression such as would indicate the description to be illustrative and not exhaustive. Further, in the case of ADITYA BIRLA NUVO LTD. VERSUS CCE, BHAVNAGAR [ 2009 (1) TMI 117 - CESTAT AHMEDABAD] , it has been held by the Tribunal that the words and includes provides for giving the definition of input services a wide interpretation, and bring into ambit those services which may not be considered as directly or indirectly relatable to manufacture. The intention being to provide the benefit of credit of service tax paid on such services. The rules specifically provide for allowing Cenvat credit of any service used by manufacturer, whether directly or indirectly in or in relation to the manufacturer of final products, and clearance of the final product up to the place of removal. In the facts and circumstances of the factory running 24X7, it is imperative for the assessee to provide and maintain the facility of residential colony adjacent to the factory, being located at a remote location - the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by them in respect of services used for construction of housing units in the colony for staff did not have a nexus with the manufacturing activity or for transport or storage of the final product. It is seen from the case records, that services like construction of residential quarters, hostels and barracks have been considered as not qualifying to be an input service in terms of Rule 2(l) of the Rules. 3. For sake of records, rule 2(l) of the Rules, as it then existed is enumerated hereunder: Rule 2 Definition - In these rules, unless the context otherwise requires (l) input service means any service, - (i) used by a provider of taxable service (ii) used by a manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and [clearance of final products upto the place of removal], and includes services used in relation to setting up, modernisation, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irectly 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 Ld.Advocate for the appellant also draws attention to the case of Commissioner of Central Excise vs. T.G. Kirloskar Automotive Pvt.Ltd. 2009 (14) STR 743 (Tri.-Bang.) , wherein the Tribunal had allowed the credit of service tax paid on mobile phones provided by the assessee to its employees for business use. Citing analogy the appellant contended that they were rightly eligible for availment of credit on such construction services as provided to the employees to meet the need of housing of its employees located in the remote area. He vehemently submits that a wide amplitude is required to be given to the meaning of the definition of input service for purpose of interpretation. He thereby refers to the inclusive definition, pointing out tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the Hon ble Bombay High Court in the case of Commissioner, Central Excise, Nagpur v. Manikgarh Cement 2010 (20) S.T.R. 456 (Bom.) had held that services of civil construction in residential colonies could not be considered as input service as it at best were a welfare measure having no nexus with business activities and was a direct judgement on the subject. 8. We have heard the two sides and perused the case records. The fact of remote location of the unit with difficult accessibility and lack of dwellings is undisputed. The Cenvat credit is availed for construction of barracks and hostel for the CISF personnel, that provide 24X7 security cover to the plant, while residential quarters were meant for the employees that were crucial to the smooth operation of the appellant s works and plant. It is evident from the language, that the expressions made use of in Rule 2(l) call for being considered in an unrestricted and uninhibited sense and thereby give the expression an exhaustive and a wider meaning so as to expand language and the arch of the expression used giving it the widest amplitude. The Hon ble apex Court in the case of Good Year India Ltd 1997 (95) E.L.T. 450 (SC) , ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re consumed for the manufacture of finished excisable goods. In this regard he submitted that providing residential accommodation to employees was a pre-requisite within the purview of CAS-4. In substantiation of his arguments he had also placed reliance on the decision of the Hon ble Karnataka High Court in the case of Commissioner of Central Excise, Bangalore vs. Millipore India Pvt. Ltd. 2012 (26) S.T.R. 514 (Kar.) wherein the Hon ble High Court had given a very wide expanse to the term while allowing the appeal in favour of the assessee. We note that the Hon ble High Court thereon had observed as under:- ..Landscaping of factory or garden certainly would fall within the concept of modernization, renovation, repair, etc., of the office premises. At any rate, the credit rating of an industry is depended upon how the factory is maintained inside and outside the premises. The Environmental law expects the employer to keep the factory without contravening any of those laws. That apart, now the concept of corporate social responsibility is also relevant. It is to discharge a statutory obligation, when the employer spends money to maintain their factory premises in an eco-friendly, ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... permissible. 13. It may be emphasized that the decision rendered by the Mumbai High Court in the case of Manickgarh Cements7, relied upon by the Ld.AR, had been subsequently considered by the various Courts. The Tribunal in the case of Commissioner of Central Excise, Trichy Vs. Madras Cements Ltd. 2019 (370) E.L.T. 568 (Tri.-Chennai) in this regard had a very close look in the matter. Relevant paras thereof bearing akinness to issues herein are reproduced hereunder : 9. The definition as seen above has a means part and an includes part. In the mean part, it says that any service used by the manufacturer whether directly or indirectly in or in relation to the manufacture of the final products and clearance of final products upto the place of removal would be an input service. The includes part is worded in such a way that it takes in a large number of services which includes services used not only directly or indirectly, in or in relation to manufacture of final products and their clearance. The meaning of the word includes was considered by the Hon ble Apex Court while deciding the interpretation of the said word in the definition of inputs in Cenvat Credit Rules, 2004. In the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 009 (240) E.L.T. 641 (S.C.) being no longer good law, the judgment rendered in the case of Manikgarh Cement relying upon the decision in the case of Maruti Suzuki Ltd. (supra), in our opinion would not be applicable. 10. At this juncture, it would be worthwhile to reproduce the discussion of Hon ble High Court of Andhra Pradesh in ITC Ltd. (supra). It reads as under :- 9. The Commissioner s Order-in-Appeal dated 27-5-2008 reflects that he accepted that the efficiency of the employees of an organization would be dependent on various factors, one such being the provision of a housing colony. He further conceded that these facilities would contribute to the enhancement of the productivity of the organization. Having stated so, the appellate authority surprisingly took the view that maintenance of the residential colony by the respondent-Company was only an obligatory activity owing to situational exigencies and was not connected either directly or indirectly to the manufacture of its final products. This inherent contradiction in the Order-in-Appeal was noted by the CESTAT, which opined that if accommodation was not provided by the respondent-Company to its employees at this remote lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered view that the credit allowed in respect of construction of residential complex and services relating to vehicle maintenance and repair service and vehicle insurance are eligible for credit whereas the credit availed on construction of school building and guest house cannot be allowed. In view thereof, the impugned order does not call for any interference. The appeals filed by the assessee as well as Revenue are dismissed. [Emphasis supplied] 14. We also note that the issue of providing residential facility to the employees was also examined by the Tribunal in the case of Mangalam Cement Ltd. v. CCE ST Jaipur-I 2016 (44) S.T.R. 422 (Tri.-Del.) and the Tribunal had the following to state:- 6. Considering the aforementioned activities and the legistature intent behind the Cenvat scheme, the Hon ble Andhra Pradesh High Court in the case of ITC Ltd. (supra), has held that Cenvat credit of service tax paid on the taxable services used in the residential complex shall be available to the manufacturer. The relevant paragraph of the said judgment is extracted herein below. 9. The Commissioner s Order-in-Appeal dated 27-5-2008 reflects that he accepted that the efficiency of the emplo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the unit is required to be provided security and by professionally trained and competent personnel, for reasons of again being situated in the remote place, far away from the limits of a municipal body. We thus feel construction services used in construction of barracks and hostel for the jawans and residential complex for the employees not only goes in to offer efficiency of the system and production of finished goods but also ensures and guarantees the unhindered production of the same. These services are certainly made use of in relation to manufacture of goods. 16. In view of various decisions, cited above, we note that this issue has also been considered time and again by various judicial authorities. The said issue is therefore no more res integra. We are of the view that in keeping with the ratio of the laws as laid down by the case laws referred and discussed above, the appellant is entitled for availment of input service tax credit for the construction of houses for its employees as also barracks and hostel for the jawans. 17. As for limitation, we also note that the demand is barred by limitation, as in any case the appellant were filing the returns regularly along with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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