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TMI Blog2025 (2) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... ction relates to the setting up of the factory which in turn, is directly used for manufacturing and is directly covers under the inclusive part of the definition of 'input service'. Moreover, during the relevant period, construction service was included in the definition of 'input service' and it is only after 01.04.2011 that it has been specifically excluded from it. Reference made to the decision of the Hon'ble Punjab & Haryana High Court in the case of CCE vs. Bellsonica Auto Components India P Ltd [2015 (7) TMI 930 - PUNJAB & HARYANA HIGH COURT], wherein the Hon'ble Punjab & Haryana High Court has held 'The Tribunal rightly did not agree with the Commissioner's findings that the services in question had been used for brining into existence an immovable property and not for the manufacture of the final product. The said services cannot be said to be remotely connected to the final product as observed by the Commissioner.' Outdoor catering service for the employees - HELD THAT:- This service is also covered under the definition of 'input service' prior to 01.04.2011 because the outdoor catering service is an activity relating to appellant's business and hence, is inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d services involved in these three appeals are identical and there is one common impugned order, all the appeals are taken up together for discussion and decision. The summary of appeal wise demands in dispute is given herein below : Appeal No. E/52865/2014 Appeal No. E/52866/2014 Appeal No. E/52867/2014 Demand of Cenvat Credit on Feb 2009 to Dec 2009 Jan 2010 to Nov 2010 Dec 2010 to Nov 2011 Total Setting up of factory building Rs. 42,64,508 Rs. 4,94,555 Rs. 81,98,677 Rs. 1,29,57,740 Outdoor catering for employees in the factory Rs. 62,010 Rs. 16,113 Rs. 1,37,488 Rs. 2,15,611 Insurance services for building and employees (denied to the extent of 50% of the total Cenvat Credit availed) Rs. 6,895 Rs. 35,650 Rs. 78,716 Rs. 1,21,261 Air Travel Agent services for travel of expatriate employees in relation to business activities (denied to the extent of 80% of the total Cenvat Credit availed) Rs. 16,248 Rs. 7,101 Rs. 22,410 Rs. 45,759 Total Rs. 43,49,661 Rs. 5,53,419 Rs. 84,37,291 Grand Total Rs. 1,33,40,371 2.1 This is the second round of proceedings. Briefly stated facts of the case are that the appellant is engaged i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the appellant and the input services were availed for construction of factory building. He also submits that such services are eligible for Cenvat Credit as per the definition of 'input services' under Rule 2(l) of the Cenvat Credit Rules as "setting up" is specifically included in 'means' part of the definition. He further submits that these services are intrinsically related to business of the appellant as without having an appropriate factory premises, the business cannot be carried out. This satisfies the 'includes' part i.e. 'activities related to business' under Rule 2(l) of the Cenvat Credit Rules. He also submits that the appellant's factory is already existing and running in production and it is only expansion of existing production capacity for which these services were availed and Cenvat Credit cannot be denied thereon. He further submits that the learned Commissioner has wrongly relied upon the judgment of the Larger Bench of the Tribunal in the case of Vandana Global Limited vs. CCE - 2010 (253) ELT 440 (Tri. LB) as the same has been overruled by the Hon'ble Chhattisgarh High Court as reported in 2018 (16) GSTL 462 (Chhattisgarh). He also submits that the said judgm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igible for Cenvat Credit as per Circular No. 943/4/2011-CX dated 29.04.2011. 4.4.1 To rebut the finding of the learned Commissioner regarding insurance of factory building, the learned Consultant submits that factory building is an integral part of the appellant's business as it is where manufacturing activity is carried out and insuring factory building covers loss of profit due to stoppage of work, due to perils like fire, riots, terrorist attack etc against any unwarranted situation of business and therefore, these services are used in relation to manufacture of the product and fall within 'means' clause of definition of input services under Rule 2(l) of the Cenvat Credit Rules. In this regard, he relies on the following decisions: * Sarita Handa Exports P Ltd vs. CCE - 2016 (44) STR 654 (Tri. Chan.) * RMZ Infotech Pvt Ltd vs. Commr of Central Tax - 2022 (64) GSTL 599 (Tri. Bang.) 4.4.2 To rebut the finding of the learned Commissioner regarding health insurance of employees, the learned Consultant submits that the health insurance services are procured for group health policy of the employees because in the absence of employees due to poor health, it would be challenging t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome period is covered after the amendment in definition of 'input services' effected from 01.04.2011. He also submits that as regards the Outdoor Catering Services, the appellant has reversed the amount collected from employees but the appellant is liable to pay the interest on that amount also. 6. We have considered the submissions made by both the parties and perused the material on record as well as various judgments relied upon by the learned Consultant for the appellant in support of his contention. 7. At the outset, we may clarify that the appellant's case is that though the period involved is from February 2009 to November 2011 but categorical stand of the appellant is that they have not availed any credit on the impugned services post 01.04.2011; it means that we have to examine whether the appellant is eligible to Cenvat Credit on these impugned services up to 31.03.2011 under the un-amended definition of 'input services' as provided in Rule 2(l) of Cenvat Credit Rules. We may take up the input services one by one. 8. The main service, on which the substantial Cenvat Credit has been denied, is of setting up of the factory building. Before we give a finding on this, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l product as observed by the Commissioner." Similarly, in the case of Rico Auto Industries Ltd (supra), this Tribunal, after relying upon the aforesaid decision of Hon'ble Punjab & Haryana High Court, has allowed the Cenvat Credit on construction services for the period prior to 01.04.2011. In view of this, we hold that the appellant is entitled to Cenvat Credit on this input service. 9. As regards outdoor catering service for the employees is concerned, we find that this service is also covered under the definition of 'input service' prior to 01.04.2011 as held in the cases relied upon by the learned Consultant for the appellant (cited supra in para 4.3 above) because the outdoor catering service is an activity relating to appellant's business and hence, is included in 'means' clause of Rule 2(l) and moreover, under the Factories Act, 1948 also, it is a statutory obligation. Further, we hold that as regards reversal of recovered amount by the appellant, the appellant is liable to pay interest on that portion, which will be calculated by the original authority and the appellant would be liable to pay the same. 10. As regards the Cenvat Credit on insurance services, we find that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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