Custom, Excise & Service Tax Tribunal
M/S.Jaypee Sidhi Cement Plant vs Cce, Bhopal on 4 August, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, NEW DELHI, PRINCIPAL BENCH NEW DELHI
Date of Hearing/Decision:4.8.2014.
For approval and signature:
Honble Shri Rakesh Kumar, Member (Technical)
--------------------------------------------------------------------------------------------------------------------------------- _________________________
1. Whether Press Reporters may be allowed to see No
CESTAT (Procedure) Rules, 1982.
2. Whether it should be released under Rule 27 of the No
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy Seen
of the Order?
4. Whether Order is to be circulated to the Departmental Yes
authorities?
Excise Stay Application No.53490 of 2014 & in
Appeal No.E/53097 of 2014
[Arising out of Order-in-Appeal No.BPL-Excus-000-APP-235-13-14 dated 20.02.2014 passed by the Commissioner of Central Excise & Customs, Bhopal]
M/s.Jaypee Sidhi Cement Plant Appellants
Vs.
CCE, Bhopal Respondent
Appearance: Rep. by Shri Hemant Bajaj, Advocate for the appellant.
Rep. by Shri M.S. Negi, DR for the respondent.
CORAM:Honble Shri Rakesh Kumar, Member (Technical) Final Order No.53199/Dated:04.08. 2014.
Per Rakesh Kumar:
The appellant are cement plant engaged in the manufacture of cement and clinker chargeable to central excise duty. In terms of the provisions of Section 45 of the Factories Act, 1948, the appellant have to maintain first-aid-box which is to be kept in the charge of responsible person, who holds the certificate in first-aid recognized by the State Government and for this purpose, the appellant have availed the service of manpower supply agents for hiring of the trained persons for providing first-aid to the workers/employees requiring the same. Similarly, first-aid box and the trained persons for providing first-aid is required to be maintained by the appellant in their mines in terms of the provisions of Section 21 of the Mines Act, 1952. For deploying the persons qualified to provide first-aid, the appellant have received the services from the man power supply agent in respect of which they availed cenvat credit of Rs.3,80,279/- during the period from December, 2008 to November, 2009. The department being of the view that these services have no nexus with the manufacturing, issued show cause notice for recovery of the above cenvat credit along with interest and also for imositon of penalty. The show cause notice was adjudicated by the Asstt. Commissioner vide order-in-original dated 23.5.2012 by which the above mentioned cenvat credit demand was confirmed against the appellant and penalty of equal amount as imposed. On appeal being filed to the Commissioner (Appeals), he by order-in-appeal dated 20.02.2014 upheld the Asstt. Commissioners order observing that the service, in question, availed by the appellant has no nexus with the manufacture of their final product and compliance with other relevant Acts is for the factory and same does not make nexus with the manufacture of their final products as per the Central Excise Law. Against this order of the Commissioner (Appeals), this appeal has been filed along with stay application. Though today this matter is listed only for hearing of the stay application, since only a short issue is involved, the bench was of the view that the matter can be heard for final disposal. Accordingly, the requirement of pre-deposit is waived and with the consent of both the sides, the matter is heard for final disposal.
2. Shri Hemant Bajaj, Advocate, ld. Counsel for the appellant, pleaded that maintaining first aid room equipped with first-aid kit along with the trained persons for providing first-aid treatment is the requirement of Section 45 of the Factories Act, 1948 and there is similar provision in respect of Mines in Section 21 of the Mines Act, 1952, that unless the appellant comply with the provisions of Factories Act and Mines Act, they would not be allowed to carry on the manufacturing activities and hence, the maintenance of first-aid box along with trained persons and the availment of services for this purpose is an activity which has to be treated as in or in relation to the manufacture of final products, that the Commissioner (Appeals)s finding that the compliance with other relevant Acts is for the factory and the same is not relevant for the purpose of Central Excise Law, is not correct, that Honble Gujarat High Court in the case of CCE, Ahmedabad Vs. Ferromatik Milacron India Ltd. 2011 (21) STR 8 (Gujarat) has held that when under the provisions of Section 46 of the Factories Act, it is mandatory for the employer to provide canteen services to the staff and thus, the provision of canteen services is a statutory requirement, it is incumbent on a manufacturer of goods, to provide the same if he desires to run his factory and in view of this, the service of outdoor catering for providing canteen facilities within the factory has to be treated as service in or in relation to manufacture of the final products and that the ratio of this judgement is squarely applicable to the facts of this case and hence, the impugned order is not correct.
3. Shri M.S. Negi, learned DR, defended the impugned order by reiterating the findings of the Commissioner (Appeals) and emphasized that the maintenance of first-aid box along with trained persons has no nexus with the manufacture of the final products.
4. I have considered the submissions from both the sides and perused the records.
5. Providing of first-aid facilities to the workers, whether in the factory or in mines is the requirement of the Factories Act, 1948 and also the Mines Act, 1952 and if a manufacturer wants to carry on manufacturing activities, he has to comply with the provisions of the Factories Act and the Mines Act. In view of this, the availment of service for maintenance of the first-aid facilities for the workers has to be treated as the service used in or in realtion to the manufacture of final products. I find that the same view has been taken by the Honble Gujarat High Court in the case of Ferromatik Milacron India Ltd. (supra). In this regard, paras-5 and 6 of this judgement are reproduced below:-
5.?Input Service is defined under Rule 2(l) of the Rules, which insofar as the same is relevant for the purpose of the present appeal, reads thus :
(l)?input service means any service,-
(i)?xxxx
(ii)?used by the 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 the services in relation to setting up, modernization, 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, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal;
6.?As noted hereinabove, under the provisions of Section 46 of the Factories Act, it is mandatory for the employer to provide canteen services to the staff. Thus, provision of canteen services is a statutory requirement. Provision of canteen services being indispensable, it is incumbent on a manufacturer of goods, to provide the same if he desires to run his factory. In view of the definition of input service which means any service used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products, the input service does not have to used directly in the manufacture of final products, it may be a service which is only indirectly used in relation to the manufacture of final products. In the circumstances, canteen services which are indispensable in relation to manufacture of the final products would certainly fall within the ambit of input service as defined under the Rules.
6. In view of the above, the impugned order denying the cenvat credit is not sustainable. The same is set aside. The appeal as well as stay application are allowed.
( Rakesh Kumar ) Member (Technical) Ckp.
1