Custom, Excise & Service Tax Tribunal
M/S Dcm Shriram Consolidated Ltd vs Cce, Jaipur I on 3 September, 2013
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. IV Excise Appeal No. 1875 of 2011 (SM) [Arising out of the Order-in-Appeal No. 184 (DKV)/ST/JPR-I/2011 dated 29/04/2011 passed by The Commissioner (Appeals), Customs & Central Excise, Jaipur.] For Approval and signature : Honble Shri Rakesh Kumar, Member (Technical) 1. Whether Press Reporters may be allowed to see : the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? 2. Whether it would be released under Rule 27 of : the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair : copy of the order? 4. Whether order is to be circulated to the : Department Authorities? M/s DCM Shriram Consolidated Ltd. Appellant Versus CCE, Jaipur I Respondent
Appearance Shri S.C. Kamra, Advocate for the appellant.
Shri R.K. Verma, Authorized Representative (DR) - for the Respondent.
CORAM : Honble Shri Rakesh Kumar, Member (Technical) DATE OF HEARING : 03/09/2013.
Final Order No. 57610/2013 Dated : 03/09/2013 Per. Rakesh Kumar :-
The appellant are manufacturers of Caustic Soda, PVC resin and other chemicals. The point of dispute is as to whether during the period from March 2007 to March 2010, they were eligible for Cenvat credit of service tax paid in respect of out door catering service for providing canteen facility to the workers in the factory, manpower supply service for maintenance of lawns and green belt around the factory and for maintaining cycle stand for the workers. The total Cenvat credit availed on these services was Rs. 5,52,594/-. The department being of the view that these services have no nexus with manufacture and are not eligible for Cenvat credit, issued a show cause notice for recovery of the Cenvat credit alongwith interest and imposition of penalty. The show cause notice was adjudicated by the Assistant Commissioner vide order-in-original dated 26/6/10 by which he confirmed the above-mentioned Cenvat credit demand alongwith interest and imposed penalty of equal amount on the appellant. On appeal being filed to Commissioner (Appeals), the Commissioner (Appeals) vide order-in-appeal dated 29/4/11 upheld the Assistant Commissioners order against which this appeal has been filed.
2. Heard both the sides.
3. Shri S.C. Kamra, Advocate, the learned Counsel for the appellant, pleaded that so far as the service of out door catering for providing canteen facility to the workers is concerned, the number of the workers in the factory is more than 250 and the appellant are required to provide canteen facility to workers/ employees under Section 46 of the Factories Act, that no amount is recovered from the workers/employees for providing canteen facility, that the issue of eligibility for Cenvat credit in respect of this service stands decided in the appellants favour by the judgment of Honble Bombay High Court in the case of CCE, Nagpur vs. Ultratech Cement Ltd. reported in 2010 (20) S.T.R. 577 (Bom.), that same view has been taken by the Honble Gujarat High Court in the case of CCE, Ahmedabad I vs. Ferromatik Milacron India Ltd. reported in 2011 (21) S.T.R. 8 (Guj.) and Honble Karnataka High Court in the case of CCE, Bangalore I vs. Bell Ceramics Ltd. reported in 2012 (25) S.T.R. 428 (Kar.), that as regards the service availed for maintaining green belt and lawn, the same has been availed to comply with the directions of Rajasthan State Pollution Control Board under their letter dated 8th January 2008 under which while permitting the discharge of Industrial effluent from the factory, the pollution control board has put a condition that 33% of the total area of the factory premises shall be covered by the tree plantation, that in view of this, unless the green belt is maintained, manufacturing operations would not allowed and hence the service availed for maintenance of lawns and green belt has to be treated as service used in or in relation to the manufacture of final product, that the Tribunal in the case of CCE, Bhavnagar vs. Nirma Ltd. reported in 2010 (20) S.T.R. 346 (Tri. Ahmd.) and in the case of JBM Auto System Pvt. Ltd. vs. CCE, Chennai reported in 2012 (27) S.T.R. 170 (Tri. Chennai) has held that the services used for maintaining lawn and green belt are eligible for Cenvat credit, that as regards the eligibility for Cenvat credit of the services used for maintenance of the cycle stand for the workers, this issue also stands decided in the appellants favour by the judgment of the Tribunal in the case of National Engineering Industries Ltd. vs. CCE, Jaipur reported in 2013 (30) S.T.R. 511 (Tri. Del.), and that in view of the above submission, the impugned order is not sustainable.
4. Shri R.K. Verma, the learned Departmental Representative, defended the impugned order by reiterating the findings of the Commissioner (Appeals) and pleaded that none of these services, especially the services of maintenance of lawns and green belt and cycle stand for workers, are eligible for Cenvat credit.
5. I have considered the submissions from both the sides and perused the records.
6. So far as the service of outdoor catering for providing canteen facility to the workers is concerned, there is no dispute that the number of workers in the appellants factory is more than 250 and the charges for providing canteen facility are not recovered from the workers. The appellant in terms of the provisions of Section 46 of the Factories Act are required to provide canteen facility to the workers for which they have availed the outdoor catering service and hence this service has to be treated as service availed in or in relation to manufacture of final product. Moreover, this issue stands decided in favour of the appellant by the judgment of Honble Bombay High Court in the case of CCE, Nagpur vs. Ultratech Cement Ltd. reported in 2010 (20) S.T.R. 577 (Bom.), and same view has been taken by the Honble Gujarat High Court in the case of CCE, Ahmedabad I vs. Ferromatik Milacron India Ltd. reported in 2011 (21) S.T.R. 8 (Guj.) and Honble Karnataka High Court in the case of CCE, Bangalore I vs. Bell Ceramics Ltd. reported in 2012 (25) S.T.R. 428 (Kar.). Therefore, the denial of Cenvat credit in respect of outdoor catering service is not sustainable.
7. As regards, the service of manpower supply for maintaining green belt and lawn, the same has been availed to comply with the directions of Rajasthan State Pollution Control Board under their letter dated 8th January 2008 under which while permitting the discharge of Industrial/Domestic effluents from the factory, the Pollution Control Board has put a condition that 33% of the total area of the factory premises shall be covered by the tree plantation. Since, without maintaining the green belt around the factory, the manufacturing operations would not be allowed, I am of the view the services for maintenance of lawn and green belt have to be treated as services used in or in relation to manufacture of final product or in other words this service has nexus with the manufacture of final product and, hence, would be eligible for Cenvat credit. I find that same view has been taken by the Tribunal in the case of CCE, Bhavnagar vs. Nirma Ltd. reported in 2010 (20) S.T.R. 346 (Tri. Ahmd.) and in the case of JBM Auto System Pvt. Ltd. vs. CCE, Chennai reported in 2012 (27) S.T.R. 170 (Tri. Chennai). In view of this, denial of Cenvat credit in respect of the service availed for maintenance of lawn and green belt also not sustainable.
8. As regards the services availed for maintaining cycle stand for workers, this issue also stands decided in favour of the appellant by the judgment of the Tribunal in the case of National Engineering Industries Ltd. vs. CCE, Jaipur reported in 2013 (30) S.T.R. 511 (Tri. Del.).
9. In view of the above discussion, the impugned order is not sustainable. The same is set aside. The appeal is allowed with consequential relief.
(Pronounced in the open court.) (Rakesh Kumar) Member (Technical) PK ??
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