Madras High Court
Wipro Limited vs Commissioner Of Central Excise on 12 April, 2017
Author: Rajiv Shakdher
Bench: Rajiv Shakdher, R.Suresh Kumar
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 12.04.2017 CORAM THE HONOURABLE MR.JUSTICE RAJIV SHAKDHER And THE HONOURABLE MR.JUSTICE R.SURESH KUMAR C.M.A.Nos.1570 and 1571 of 2015 Wipro Limited ... Appellant in both C.M.As. Vs. Commissioner of Central Excise, Goubert Avenue (Beach Road) Pondicherry. ... Respondent in both C.M.As. Common Prayer: Appeals filed under Section 35 G of the Central Excise Act, 1944, against the order dated 02.03.2015 passed in Final Order No.40223 and 40224 of 2015 respectively, by the Customs, Excise and Service Tax Appellate Tribunal, Chennai. For Appellant : Mr.S.Muthuvenkataraman For Respondent : Mr.A.P.Srinivas C O M M O N J U D G M E N T
(Judgment of the Court was delivered by RAJIV SHAKDHER,J.)
1.These appeals have been filed under 35 G of the Central Excise Act, 1944, whereby, challenge is laid to the final order dated 02.03.2015, passed by the Customs, Excise and Service Tax Appellate Tribunal, Chennai.
2.The issue involved before the Tribunal, was, as to whether the Assessee should be given cenvat credit, in respect of house keeping and land scaping services.
2.1.The Tribunal, was also required to rule on, as to whether cenvat credit should be made available to the Assessee on courier services.
2.2.The Tribunal via the impugned judgment and order allowed the appeal of the Revenue partly, in as much as it held that the Assessee was entitled to avail of cenvat credit qua courier services. In so far as the Assessee's claim to cenvat credit on house keeping and land scaping services was concerned, the same was declined.
2.3.It is, in these circumstances, that the Assessee has come up in appeal, before this Court.
3.The captioned appeals were admitted vide order dated 21.08.2015 when, the following questions of law, were framed for consideration by the Court:
1.Whether the Tribunal was right in rejecting the Cenvat Credit availed on House Keeping and Landscaping Services from the scope of term input service defined in Rule 2(1) of the Cenvat Credit Rules 2004 by the appellant?
2.Whether the Tribunal was right in partly allowing the appeal filed by the respondent without taking in account of the decision of the Hon'ble High Court of Karnataka in Commissioner of C.Ex, Bangalore II Vs. Millipore India Pvt Ltd., reported in 2012(26) STR 514(Kar), which was subsequently followed by this Hon'ble High Court in the case of Commissioner of Central Excise and Service Tax Large Tax Payer Unit vs. M/s.Rane TRW Steering Systems Ltd., reported in 2015-TIOL-1057-HC-MAD-CX?
4.Mr.Srinivas, who appears for the Revenue, says that in so far as the Question nos.1 and 2 are concerned, they are covered against the Revenue, in view of the decision rendered by a Division Bench of this Court in Commissioner of Central Excise and Service Tax vs. Rane TRW Steering Systems Limited, 2015 (39) S.T.R. 13 (Mad.).
5.To be noted, the appellant is in the business of manufacturing computers and automatic data processing machines, falling under Chapter Heading 8471 of schedule to the Central Excise Tariff Act, 1985.
5.1.The appellant inter alia had been taking credit of service tax, paid on man-power supplied for house keeping and gardening and for courier services.
5.2.As indicated above, though the Tribunal granted relief via the impugned judgment and order, vis-a-vis, cenvat credit taken on courier service, it declined relief with respect to house keeping and gardening services.
5.3.It is, in these circumstances that the matter has travelled to this Court.
5.4.As indicated above, this Court in similar circumstances held that cenvat credit would be available to an Assessee with respect to house keeping and land scaping services.
5.5.This Court, followed the view of the Division Bench of the Karnataka High Court in Commissioner of Central Excise, Bangalore II Vs. Millipore India Pvt Ltd., 2012 (26) STR 514 (Kar). The relevant observations of this Court in Rane TRW Steering Systems Limited case are extracted hereinafter:
7.In Commissioner of Central Excise, Bangalore II Vs. Millipore India Pvt Ltd., [2012 (26) S.T.R. 514 (Kar)], the Division Bench of the Karnataka High Court had occasion to consider similar issue and in the facts of the said case, while considering the definition 'input services' as defined under Section 2(1) of the Cenvat Credit Rules, 2004, the Karnataka High Court held as under:-
7.That apart, the definition of input services is too broad. It is an inclusive definition. What is contained in the definition is only illustrative in nature. Activities relating to business and any services rendered in connection therewith, would form part of the input services. The medical benefit extended to the employees, insurance policy to cover the risk of accidents to the vehicle as well as the person, certainly would be a part of the salary paid to the employees. 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 manner, certainly, the tax paid on such services would form part of the costs of the final products. In those circumstances, the Tribunal was right in holding that the service tax paid in all these cases would fall within the input services and the assessee is entitled to the benefit thereof. In that view of the matter, we do not see any infirmity in the order passed by the Tribunal. Accordingly, the substantial questions of law framed in this appeal are answered in favour of the assessee and against the Revenue. The appeal is dismissed.
8.A cursory reading of the said judgment reveals that the facts in issue therein are similar to the facts in the present case. It is clear from the decision that where an employer spends money to maintain their factory premises in an eco-friendly manner, the tax paid on such services would form part of the cost of the final products and the same would fall within the ambit of input services and, therefore, the assessee is entitled to claim the benefit. This Court is in agreement with the ratio laid down in Millipore India Pvt. Ltd. case (supra), which is equally applicable to the case on hand and following the said decision, this appeal is liable to be dismissed. Accordingly, the substantial question of law is answered in favour of the assessee/ respondent and against the appellant/ Revenue. (emphasis is ours)
6.Mr.Srinivas, who appears for the Revenue, does not dispute the fact that the house keeping and land scaping services are availed of, by the Assessee, in its factory premises.
7.Having regard to the aforesaid, to our minds, the ratio of the judgments rendered in Commissioner of Central Excise and Service Tax vs. Rane TRW Steering Systems Limited, 2015 (39) S.T.R. 13 (Mad.) and in Commissioner of Central Excise, Bangalore II Vs. Millipore India Pvt Ltd., 2012 (26) STR 514 (Kar), would apply to the facts of this case. Accordingly, both the questions of law, are answered in favour of the Assessee and against the Revenue.
8.The impugned judgment and order of the Tribunal is set aside. The appeals are consequently, allowed. However, there shall be no order as to costs.
[R.S.A.,J.] [R.S.K.,J.]
12.04.2017
pri
Speaking order / Non Speaking order
Index: Yes / No
Internet: Yes / No
RAJIV SHAKDHER,J.
AND
R.SURESH KUMAR,J.
pri
To
1.The Commissioner of Central Excise,
Goubert Avenue (Beach Road)
Pondicherry.
2.The Customs, Excise and Service Tax Appellate Tribunal,
Chennai.
C.M.A.Nos.1570 and 1571 of 2015
12.04.2017
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