Hindustan National Glass & Industries ... vs Cce, Nashik

[Arising out of Order-in-Appeal No. AKP/115/NSK/2009 dated 09.12.2009 passed by the Commissioner (Appeals) Central Excise & Customs, Nashik].

For approval and signature:

Honble Shri Ramesh Nair, Member (Judicial)

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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 : Seen of the order?

4. Whether order is to be circulated to the Departmental : Yes authorities? ======================================================

Hindustan National Glass & Industries Ltd. Appellant

Vs.

CCE, Nashik Respondent

Appearance: Mr. Pradeep Korde, Consultant for Appellant

Mr. Ashutosh Nath, Asstt. Commr. (AR) for Respondent

CORAM: HONBLE SHRI RAMESH NAIR, MEMBER (JUDICIAL)

Date of Hearing: 15.05.2015

Date of Decision: 15.05.2015

ORDER NO.

Per: Shri Ramesh Nair

This appeal is directed against Order-in-Appeal No. AKP/115/NSK/2009 dated 09.12.2009 passed by Commissioner (Appeals) Central Excise & Customs, Nashik, wherein the Ld. Commissioner partly allowed the Cenvat credit on certain input services and partly disallowed the Cenvat credit amounting to Rs.27,291/- on the inputs services namely Vehicle Maintenance Services (Rs.1,353/-), Group Health Insurance (Rs.24,682/-), Garden Maintenance (Rs.1,034/-) and Entertainment Services (Rs.222/-). Aggrieved by the portion of credit disallowed as detailed above, the appellant filed the present appeal.

2. Shri Pradeep Korde Ld. Consultant submits that all these services were used in relation to manufacturing in the factory. He submits that the Ld. Commissioner disallowed the credit on the ground, that the appellant have not explained use of these services. He submits that in the Order-in-Original all the services have been explained and same has been recorded by the authority. Therefore, the contention of Ld. Commissioner is incorrect. In support of his claim of Cenvat credit, he placed reliance on following judgments:

Group Health Insurance Service Commissioner of Central Excise & Customs, Aurangabad V/s Endurance Systems India Pvt. Ltd. [2009 (237) E.L.T. 204] Vehicle Maintenance Service Millipor India Ltd. V/s Commissioner of C.Ex., Bangalore [2009 (236) E.L.T. 145]

In view of above, it is his submission that the Cenvat credit of Group Health Insurance Service is available. He further submits that Vehicle Maintenance Services in respect of Vehicle of Appellants Company used for the factory purpose. Therefore, it is direct by related to the manufacture of final product. Similarly Garden Maintenance is under mandatory provision under Factory Act, for the environment of the factory. Hence, the credit is admissible. As regard Entertainment Service, he submits that these are hotel expenses for conducting the meeting in the hotel for management staff and union leaders. This meeting related to the functioning of the factory. Therefore, all the services are used in relation to manufacture by the appellant. He also submits that cost of all the services in question are absorbed in the cost of the final product manufactured by the appellant. In view of the larger bench judgment in the case of G.T.C. Industries Ltd. 2008-12 STR 468 (Tri.-LB) wherein held that if the value of the service is absorbed in the cost of the final product, then credit should be allowed.

3. Shri Ashutosh Nath, Ld. Asstt. Commr. (AR) appearing for the revenue reiterates the findings of the impugned order. He further submits that the appealant could not establish the nexus between these services and the manufacture. Therefore, Commissioner of Appeal has rightly denied the Cenvat credit. In his support, he placed reliance on the following judgment.

4. I have carefully considered the submission made by both the sides. These services are Vehicle Maintenance Service, Group Health Insurance Service, Garden Maintenance and Entertainment Service. As per the submission of the Learned Counsel and the recorded facts in the Order-in-Original, I find that Vehicle Maintenance Services are in respect of vehicles used by the appellant for their factory staff. Therefore, in my view it is clearly covered under the definition of input service as same is used in the relation of the production of the appellant. Group Health Insurance is provided to the factory workers and staff, who are directly engaged in the production activity. As regard Garden Maintenance Service, the Garden is maintained in the factory under the statutory obligation, under the factory Act. This Tribunal in various judgments allowed the Cenvat credit in respect of Garden Maintenance. As regard Entertainment Service, this is hotel service used for conducting meeting among management staff, union leaders and workers for important issues of factory. In my view, this service has nexus with the production activity of the appellants factory.

5. In view of my above observation, I am of the considered view that in all these four services, Cenvat credit is admissible. Therefore, the appeal of the appellant is allowed.

(Dictated in Court)

(Ramesh Nair) Saifi Member (Judicial)

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