Custom, Excise & Service Tax Tribunal
M/S Yutaka Auto Parts India Pvt. Ltd vs Cce, Jaipur I on 4 June, 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. 1256 of 2012 (SM) [Arising out of the Order-in-Appeal No. 08-09 (AKJ) CE/JPR-I/2012 dated 13/02/2012 passed by The Commissioner, Central Excise & Customs, Jaipur I.] 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 Yutaka Auto Parts India Pvt. Ltd. Appellant Versus CCE, Jaipur I Respondent
Appearance Shri Hemant Bajaj, Advocate for the appellant.
Ms. S. Bector, Authorized Representative (DR) - for the Respondent.
CORAM : Honble Shri Rakesh Kumar, Member (Technical) DATE OF HEARING : 04/06/2013.
Final Order No. 56641/2013 Dated : 04/06/2013 Per. Rakesh Kumar :-
The appellant are manufacturers of auto parts. The point of dispute is as to whether during the period from 1/4/08 to 31/3/10 they were eligible for Cenvat credit of service tax paid on outdoor catering service for providing canteen facilities to the employees, manpower supply service for gardening and land scaping for compliance with the directions of Pollution Control authorities, cleaning service for keeping the factory neat and clean and rent a cab service for provide transport facility to the employees for bringing them to the factory and dropping them back at their homes. The appellant in respect of these services took total Cenvat credit of Rs. 7,93,920/- during the above-mentioned period. The department being of the view that these services are not covered by the definition of input service, issued two show cause notices for recovery of the above-mentioned Cenvat credit alongwith the interest and imposition of penalty. These two show cause notices were adjudicated by Joint Commissioner vide order-in-original No. 72-73/2011 dated 20th April, 2011 by which the Cenvat credit demand of Rs. 7,93,920/- was confirmed against the appellant alongwith interest and beside this, penalty of Rs. 2,000/- each was imposed on them. On appeal to Commissioner (Appeals) against the orders of the Joint Commissioner, the same were dismissed vide order-in-appeal No. 08-09 (AKJ) CE/JPR-I/2012 dated 13/2/2012. Against this order of the Commissioner (Appeals) this appeal has been filed.
2. Heard both the sides.
3. Shri Hemant Bajaj, Advocate, the learned Counsel for the appellant, pointing out to the findings recorded by original Adjudicating Authority in para 9 (C) and 9 (D) of the order-in-original dated 20/4/11 pleaded that even the original Adjudicating Authority has given a clear finding that availing canteen and house keeping services for cleaning in the factory, are a statutory requirement under Factories Act, that gardening and land scaping services are required for their manufacturing plant to comply with pollution control norms and create healthy atmosphere for the working staff, that in view of these findings of the original Adjudicating Authority, these services have to be treated as the services availed in relation to manufacture of the finished product, that outdoor catering service had been availed for providing canteen facility to the workers which is the statutory requirement under Section 46 of the Factories Act, 1956, that gardening and land scaping service is required to be availed for maintaining green belt around plants for compliance with pollution control laws without which the manufacturing activity would not be allowed, that maintaining neat and clean and dust free atmosphere within the factory is the statutory requirement in terms of Section 7A and Section 11 to 16 of the Factories Act, that in view of this, these three services have to be treated as the services availed in relation to manufacture, as without availment of these services, the manufacturing activity would not be allowed, that for this reason only the Tribunal in a series of judgment has held that above three services are eligible for Cenvat credit, that rent a cab was availed for transportation of the workers and employees from the residences to the factory and dropping them back, that this service is also cenvatable in view of judgment of Honble Karnataka High Court in the case of CCE, Bangalore III vs. Stanzen Toyotetsu India (P) Ltd. reported in 2011 (23) S.T.R. 444 (Kar.), the judgment of Honble Punjab & Haryana High Court in the case of CCE, Chandigarh II vs. Federal Mogul Goetze (India) Ltd. reported in 2011 TIOL 650 HC P&H ST and also the judgment of Honble Karnataka High Court in the case of CCE vs. Bell Ceramics Ltd. 2012 (25) S.T.R. 428 (Kar.) and that in view of this, the impugned order upholding the denial of Cenvat credit in respect of these services is not sustainable.
4. Ms. S. Bector, the learned Departmental Representative, defended the impugned order by reiterating the findings of the Commissioner (Appeals).
5. I have considered the submissions from both the sides and perused the records.
6. There is no dispute that service of outdoor catering has been availed for providing canteen facility to the workers which is necessary for compliance with the provisions of Section 46 of the Factories Act. This fact has also been accepted by the Adjudicating Authority in para 9 (C) of the order passed by him. As regards, the gardening and land scaping service, the same is required for maintaining green belt which is the requirement of pollution control laws and this position also stands accepted by the original Adjudicating Authority in para 9 (C) of the order-in-original. As regards, the service of cleaning, the same had been availed for keeping the factory neat and clean and dust free, which is also the statutory requirement of Section 7A and Section 11 to 16 of the Factories Act, 1956. Thus without these services a manufacturer would not be allowed to carry on manufacturing operations, as if he does not provide canteen facility to the workers or does not maintain green belt or does not maintain neat and clean, and dust free atmosphere in the factory he will face penal action from the statutory authorities. In view of this, availment of these services has to be treated as services availed in or in relation to manufacture of the finished product and as such the findings of the Commissioner (Appeals) that these services have no nexus of the manufacture of finished product are not sustainable. I find that the same view has been taken by the Tribunal in the cases of CCE, Bangalore III vs. Stanzen Toyotetsu India (P) Ltd. (supra), CCE, Nagpur vs. Ultratech Cement Ltd. 2010 (20) S.T.R. 577 (Bom.), CCE, Ahmedabad I vs. Ferromatik Milacron India Ltd. 2011 (21) S.T.R. 8 (Guj.), Balakrishna Industries Ltd. vs. CCE, Aurangabad 2010 (18) S.T.R. 600 (T), Millipore India Ltd. vs. CCE, Bangalore II 2009 (236) E.L.T. 145 (T), CCE, Bangalore vs. Millipore India (P) Ltd. 2012 (34) STT 86 (Kar.), CCE, Bhavnagar vs. Nirma Ltd. 2010 (20) S.T.R. 346 (T) and Brakes India Ltd. vs. CCE, Mysore 2010 (19) S.T.R. 524 (T). In view of this, the impugned order upholding the denial of Cenvat credit in respect of the services of outdoor catering, gardening and land scaping and cleaning services is not sustainable.
7. As regards, the service of rent a cab availed for bringing the workers to the factory and dropping them home, this issue also stands decided in favour of the appellant by the judgments of Honble Punjab & Haryana High Court and Karnataka High Court, as mentioned above and, therefore, the finding of the Commissioner (Appeals) on this issue are also not sustainable.
8. In view of the above discussion, the impugned order is not sustainable. The same is set aside. The appeal is allowed.
(Pronounced in the open court.) (Rakesh Kumar) Member (Technical) PK ??
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