M/S. Bajaj Hindusthan Ltd vs C. C.E. Allahabad

[Arising out of Order-In-Appeal No. 208/CE/APPL./ALLD/2011 dated: 10.07.207.10.201113 passed by CCE Allahabad]

For approval and signature:

Hon'ble Mr. S.K. Mohanty, 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 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 of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

M/s. Bajaj Hindusthan Ltd. ...Appellant

Vs.

C. C.E. Allahabad Respondent

Appearance:

Mr. P K Mittal, (Advocate) for the Appellant

Mr. R K Mishra, DR for the Respondent

CORAM:

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

Date of Hearing. 13.07.2015

Final Order No. 52205 /2015_

Per S K Mohanty:

This appeal is directed against the impugned order dated 7.10.2011 passed by the Commissioner (Appeals), Central Excise and Service Tax, Allahabad, wherein cenvat credit taken on the disputed services for construction of dormitory in the precincts of the factory has been denied to the appellant.

2. The Ld. Advocate, Sh. P.K. Mittal appearing for the appellant submits that the issue arising out of the present appeal is no more res-integra in view of the decision of this Bench of the Tribunal in the case of the appellant itself. In this context, he relies on the final order No. A-51861-51863/2015-SM(Br.) dated 8.6.2015 and final order No. A-51868-51969/2015-SM(Br.) dated 17.06.2015 passed by this Tribunal.

3. On the other hand, the Ld. DR Sh. R K Mishra appearing for the respondent reiterated the findings recorded in the impugned order. He relies on the judgment of Honble Bombay High Court in the case of CCE Nagpur vs Manikgarh Cement reported in 2010 (20) STR 456 (Bom.) to justify the stand that services used for construction of dormitory will not be considered as input service for the purpose of taking cenvat credit.

4. I have heard the Ld. Counsel for both the sides and perused the records.

5. I find that the issue arising of the present appeal is squarely covered by the decision of this Bench of the Tribunal referred (supra). The Judgment of Honble Bombay High Court in the case of Manikgarh Cement (supra) cited by the Ld. DR is not applicable to the facts of the present case, in as much as, though the issue involved in the said decided case was with regard to establishing the nexus between the services rendered and the business carried on by the assessee, but the phrase activities relating to business as contained in the definition clause of input service has not been discussed therein, while arriving at the conclusion that the appellant is not entitled to cenvat credit on the construction services. The Honble Bombay High Court in the case of CCE vs Ultratech Cement Ltd., reported in 2010 (260) ELT 369 (Bom.), upon analysis of the inclusive part of the definition of input service, have held that the definition of input service is not restricted to services used in or in relation to manufacture of final products, but extends to all services used in relation to the business of manufacturing the final product. In the present case, construction of dormitory adjacent to the factory premises was the necessity because of the location of the factory in a remote area, where if the accommodation is not provided to the staff/workers, the continuous manufacturing activity will hamper. Further, the cost towards such construction has also been taken into consideration in the books of accounts of the appellant. Thus, I am of the opinion that such construction activity is in relation to the business of the appellant, and therefore, service tax paid for accomplishing the purpose of business, will merit consideration as input service for the purpose of Cenvat benefit.

6. In view of the fact that the issue involved in the present case is no more res integra, I am of the opinion that the appellant is eligible to take Cenvat credit of service tax paid on the disputed services. Therefore, the impugned order is set aside and the appeal is allowed in favour of the appellant.

(Dictated and pronounced in open court)

(S. K. Mohanty) Member(Judicial)

Neha

Page | 4