Custom, Excise & Service Tax Tribunal
L Oreal India Pvt. Ltd vs Commissioner Of Central Excise, Pune-I on 30 November, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI APPEAL NO. E/956 & 957/09 (Arising out of Order-in-Appeal No. P-I/VSK/24 & 25/2009 dated 10/2/2009 passed by the Commissioner (Appeals) Central Excise, Pune-I) For approval and signature: Honble Shri Ashok Jindal, Member (Judicial) ============================================================
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should 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 : Yes
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
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LOreal India Pvt. Ltd.
:
Appellants
VS
Commissioner of Central Excise, Pune-I
Respondents
Appearance
Shri S. Murthy, Advocate for Appellants
Shri S.S. Katiyar, SDR Authorized Representative
CORAM:
Shri Ashok Jindal, Member (Judicial)
Date of decision : 30/11/2010
ORDER NO.
Per : Ashok Jindal, Member (Judicial)
Appellants are denied input service credit on the services mentioned hereunder below.
a) Outdoor catering services availed in guest house.
b) Garden maintenance basis.
c) House Keeping at Guest House.
d) House Keeping at factory.
e) Picnic and jungle cutting.
The lower authorities have denied input service credit on these services holding that these services have no nexus with the manufacturing activity of the appellant hence they are not entitled to take input service credit, as per Rule 2(l) of the Cenvat Credit Rules, 2004.
2. The learned Advocate for the appellant submits that services of outdoor catering service, gardening, housekeeping of guest house and factory premises are very much related to the business activity of the appellant, who is engaged in the manufacturing activity of excisable goods. With regard to jungle cutting services, he submitted that to keep their finished product bacteria free, they have to maintain atmosphere around their factory completely free of bacteria etc. and in pursuance to that they take the services of jungle cutting to maintain their finished products bacteria free. Hence, the impugned service qualifies for to take credit. With regard to picnic service, he submitted that picnic service is for the employees of the factory of the appellants, which gives the boosing to do the employees to do work in their factory effectively. Hence, the input service credit is to be allowed.
3. On the other hand, the learned DR submitted that the catering service has been availed by the appellants in their guest house and it is the duty of the appellant to prove the nexus of the services availed by them with their manufacturing activity, which they failed in all the above mentioned services. Hence, the lower authority has rightly denied input service credit to the appellants.
4. Heard and considered.
5. On careful examination of the submissions made by both the sides I find that in the recent decision of the Bombay High Court in the case of Ultratech Cement Ltd. Vs. 2010 TIOL 745 (H.C.) wherein the Honble High Court has held that the assessees entitled to avail input service credit of the services availed by the assessee in their business activity of manufacturing i.e. if the assessees (manufacturer) is availing any service in the course of their business activity then the assessee is entitled for input service credit. In this case no doubt the guest house has been maintained by the appellant for their business activity and not for any welfare of the society. Hence, the appellants are entitled for input service credit on outdoor catering service/house keeping service except for the portion of their service for which they have recovered some amount from the persons staying in guest house. With regard to garden maintenance service and house keeping service of the factory as they are availed by the appellants in the course of their business, they are entitled for input service credit. With regard to the picnic services, this service do not have any nexus with the business activity of the appellants. Hence, the input service credit on the picnic service is denied .Fnally on jungle cutting service, which is required by the appellant to keep the environment without bacteria in the surroundings of their factory which amounts to availment of the said service for their business of manufacturing. Hence, the appellants are entitled for availment of input service credit on these services also. As the issue involved of interpretation of statute no penalties are warranted in this case. It is pertinent to mentioned here that the portion of services, on which the credit has been denied, the appellant shall pay interest on them as applicable rates.
6. With these observations, the appeals are disposed of.
(Dictated in court) (Ashok Jindal) Member (Judicial) Sm 3