Gujarat High Court
Commissioner Of Central Excise vs Transpek Industry Ltd....Opponent(S) on 28 September, 2017
Author: Akil Kureshi
Bench: Akil Kureshi, Biren Vaishnav
O/TAXAP/743/2017 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 743 of 2017
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COMMISSIONER OF CENTRAL EXCISE, CUSTOMS AND SERVICE TAX,
VADODARA....Appellant(s)
Versus
TRANSPEK INDUSTRY LTD....Opponent(s)
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Appearance:
PRIYANK P LODHA, ADVOCATE for the Appellant(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE BIREN VAISHNAV
Date : 28/09/2017
ORAL ORDER
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI)
1. Department is in appeal against the judgment of CESTAT dated 09.12.2016 raising following question for our consideration:
"Whether in the facts and circumstances of the case and law, the Hon'ble Tribunal has committed substantial error of law in holding that the Respondent is entitled to avail the CENVAT Credit on outdoor 'catering services' & 'RentaCab services' provided in the factory for employees of the factory ?"
2. The question involves two separate issues, both concerning the entitlement of the manufacturer to cenvat credit. First is on the outdoor catering Page 1 of 5 HC-NIC Page 1 of 5 Created On Mon Oct 02 06:27:07 IST 2017 O/TAXAP/743/2017 ORDER services and the second is with respect to charges for rent a cab services. Learned counsel for the department candidly pointed out that both issues have been examined by this Court earlier.
3. In case of Principal Commissioner v. Essar Oil Ltd. reported in (2016) 53 VST 317 (Guj), Division Bench of this Court on the question of charges for rent a cab services, noted the facts presented by the assessee as under:
"4. Rent a Cab Operators Service/ Tour Operator Services/ Travel Agent Services:
This service is pertaining to the hiring of vehicles, which are used by their employees for their movement within the refinery premises or for outward traveling in connection with out business. It is submitted that the vehicles are always hired for the purpose of travel by employees for discharging their responsibilities which are always either in connection with our manufacture/ business. It is further submitted that it will be impossible for a refinery of our size to operate without having basic transportation facilities for internal movement of employees, which is essential to carry out the manufacturing activity. Further, the employees are required to undertake various business travels, without which it is impossible to carry the business. In view of the above, the nexus between this service and our manufacturing activity/ business cannot be ignored and the proposal to deny the credit on this input service is not tenable in law and on facts..."
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O/TAXAP/743/2017 ORDER
In this context, the Court held and observed as under:
"5. From the record it does emerge that there was no dispute even by the Department on the issue that the assessee had consumed for itself various services at various stages in their manufacturing and business activities. Cost was born by the assessee which also formed a part of the value of the goods manufactured.
6. Rule 2 (l) of the Cenvat Credit Rules, 2004 defines input service. This definition is couched in means and includes the expression. The definition 'input service' would mean, any service used by the provider of output service, or used by the manufacturer directly or indirectly in or in relation to the manufacture of final products and clearance of final products from the place of removal, and would include various services specified in the said definition. Thus, the term 'input service' would mean any service used by the manufacturer directly or indirectly in or in relation to manufacture of final products and clearance of final product from the place of removal. In view of such broad definition, three authorities below concurrently, and in our opinion correctly, found that the service in question was 'input service' and the service tax paid thereon would be available to the assessee by way of Cenvat Credit. No question of law, therefore, arises. Tax Appeal is dismissed."
4. Likewise on the question of charges for rent a cab service, Division Bench of this Court in case of Commissioner of Central Excise v. Ferromatik Milacron India Ltd., reported in 2011 [21] S.T.R. 8 (Guj), in the context of outdoor catering charges, the Page 3 of 5 HC-NIC Page 3 of 5 Created On Mon Oct 02 06:27:07 IST 2017 O/TAXAP/743/2017 ORDER Court held and observed as under:
"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.
7. Moreover, rule 3 of the Rules insofar as the same is relevant for the present purpose provides that the manufacturer shall be allowed to take credit of the service tax leviable under section 66 of the Finance Act; paid on any input service received by the manufacturer of final product on or after the 10th day of September, 2004. A plain reading of the said rule makes it clear that the said provision does not qualify the nature of input service availed of by the manufacturer.
8. In the above factual and legal background, the Tribunal was justified in holding that the service tax paid on outdoor catering services by the canteen located in the respondent's manufacturing premises has to be considered as an input service relating to business and that CENVAT credit is admissible in respect of the same. The view taken by the Tribunal being in consonance with the Page 4 of 5 HC-NIC Page 4 of 5 Created On Mon Oct 02 06:27:07 IST 2017 O/TAXAP/743/2017 ORDER provisions of the Rules does not suffer from any legal infirmity so as to warrant interference. In absence of any question of law, much less any substantial question of law, the appeal is dismissed."
5. In the result, Tax Appeal is dismissed.
(AKIL KURESHI, J.) (BIREN VAISHNAV, J.) ANKIT Page 5 of 5 HC-NIC Page 5 of 5 Created On Mon Oct 02 06:27:07 IST 2017