Custom, Excise & Service Tax Tribunal
M/S. H.E.G. Ltd vs Cce, Raipur on 11 June, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST BLOCK NO. 2, R.K. PURAM, NEW DELHI COURT III CENTRAL EXCISE APPEAL NO. 1409-10 OF 2007-SM [Arising out of Order-in-Appeal No. 72-73/RPR-II/2007 dated 28.03.2007 passed by the Commissioner (Appeals-II), Central Excise & Customs, Raipur] For approval and signature: Honble Mr. P.K. Das, Member (Judicial) 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 Departmental authorities? M/s. H.E.G. Ltd., Appellants Vs. CCE, Raipur Respondent
Appearance:
Shri B.L. Narasimhan, Advocate for the Appellants;
Shri R.K. Verma, D.R. for the Revenue Coram:
Honble Mr. P.K. Das, Member (Judicial), Date of hearing/decision: 11th June, 2009 FINAL ORDER NO._________________ dated __________ Per P.K. Das:
Both the appeals are arising out of common order and, therefore, both are taken up together for disposal.
2. The appellants filed these appeals against denial of credit on input services namely Landline telephone, Cleaning & Maintenance of Garden, Pandal Samiyana services and Group insurance to the employees.
3.After hearing both sides and on perusal of the records, admissibility of credit on the above items is discussed as under:-
(a) Landline Telephone The Commissioner (Appeals) observed that the availment of credit is of service tax paid on the landline telephone charges but these telephones are installed at the residence of the staff.
The Honble Gujarat High Court in the case of CCE, vs. Excel Crop Care Ltd., reported in 2008 (12) STR 436 (Guj.) held that the phones were not installed in the factory premises, cannot be termed to be a ground to deny the credit. Honble High Court observed that no material was produced to show that the activity used by the manufacturer in relation to the manufacture of goods.
In the present case, I find that the credit was denied on the ground that Landline telephone were installed at the residence of staff. Hence, denial of credit on Landline telephone is not justified.
(b) Cleaning & Maintenance of Garden The Commissioner observed that the cleaning and maintenance of garden and tank near power plant and gardening at transit house; which is at Bhilai. The specialized cleaning activity such as disinfecting, exterminating or sterilizing of object or premises in relation to agriculture, horticulture, animal husbandry or dairying are not under the purview of cleaning service. Learned D.R. submits that cleaning and gardening services were rendered outside the factory and, therefore, they are not eligible for credit.
Learned Advocate submits that cleaning and gardening service was rendered in relation to the factory and, therefore, they are eligible for credit. He further submits that credit was denied on the ground that service tax was leviable on cleaning and gardening.
I find that the Commissioner (Appeals) denied the credit on the ground that the service tax is not leviable on cleaning and gardening services. In my view, denial of credit on this ground is not justified. However, I observe that cleaning and gardening are rendered in relation to the business activity and, therefore, the appellants are eligible to avail the credit.
(c) Pandal & Shamyana The Commissioner (Appeals) observed that the services were availed in case of some exigency and it has no relation with the business of the appellants.
Learned D.R. submits that there is no material available that Pandal & Shamyana services were rendered in the business activities. He also submits that bills were not raised in the name of Pandal & Shamyana services.
Learned Advocate relied upon the decision of the Larger Bench of the Tribunal in the case of CCE, Mumbai-V vs. GTC Industries Ltd., reported in 2008 (12) STR 468 (Tri. LB). He submits that Pandal & Shamyana services were rendered for the business activities insofar as for the functions of the factory.
I find that the Larger Bench of the Tribunal in the case of GTC Industries Ltd. (supra) held that employment of outdoor caterer for providing catering services has to be considered as an input service relating to the business and Cenvat credit in respect of the same will be admissible. Finding of the Larger Bench is reproduced below:-
The context in which and the purpose for which the credit rules have been issued are clear from the press note dated August 12, 2004 issued by the Ministry of Finance, prior to introduction of the credit rules wherein the draft rules were circulated for inviting comments from trade and industry. This note clearly states that In principle, credit of tax on those taxable services would be allowed that go to form a part of the assessable value of which excise duty is charged. It is seen that the findings of the Commissioner (Appeals) that Pandal & Shamyana services has no relation with the business activities of the appellants is without any basis. In any event the submission of the learned Advocate that Pandal & Shamyana were rendered for the functions of the factory. As such, there is no reason to deny the credit on Pandal & Shamyana.
(d) Group Insurance Services It is seen that the Commissioner (Appeals) allowed the credit relating to Insurance of cars & Two wheelers which are owned by the appellants and are used in performing the business activities but, he denied the credit on personal insurance policies of the employees covered by the National Insurance Company. I find that the Tribunal allowed the credit on Group Mediclaim policy and Workmens Accident Policy in the following cases:-
(i) CCE&C, Aurangabad vs. Endurance Systems India Pvt. Ltd. 2009 (237) ELT 204 (Tri.-Mumbai);
(ii) Millipore India Ltd. vs. CCE, Bangalore II 2009 (236) ELT 145 (Tri. Bang.) In view of the above decisions of the Tribunal, denial of credit on Group Insurance is not justified.
4. In view of the above discussion, denial of credit on Landline Telephone, Pandal & Shamyana and Insurance services are set aside. Regarding denial of credit on Cleaning & Gardening services the original authority is directed to allow the credit subject to the verification whether services are rendered in relation to business activities. Penalties are set aside. Both the appeals are allowed in above terms.
(Dictated & pronounced in the Open Court.) (P.K. DAS) MEMBER (JUDICIAL) RK