M/S. Finolex Industries Limited vs Commissioner Of Central Excise, Pune

[Arising out of Order-in- Appeal No. PI/VSK/94/09 dtd. 31/3/2009 passed by the Commissioner(Appeals), Central Excise Pune]

For approval and signature:

Honble Mr 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?

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M/s. Finolex Industries Limited : Appellants

VS

Commissioner of Central Excise, Pune-1 : Respondent

Appearance

Ms. Anjali Hirawat, Advocate for the Appellant Shri. N. Prabhudesai, Superintendent (A.R.) for the Respondent

CORAM:

Honble Mr. Ramesh Nair, Member (Judicial)

Date of hearing: 15/1/2015 Date of decision: /2/2015

ORDER NO.

Per : Ramesh Nair

The Appeal is directed against Order-in- Appeal No. PI/VSK/94/09 dtd. 31/3/2009 passed by the Commissioner (Appeals), Central Excise Pune, wherein the order of the original authority was upheld and the Appeal of the appellant set aside. The issue involved is the admissibility of Cenvat credit on the out door catering service, maintenance of the guest house, gardening and security service.

2. Ld. Counsel, Ms. Anjali Hirawat submits that all the services of which Cenvat credit was taken are covered under the definition of the input services provided under Cenvat Credit Rule 2004. As regard out door catering service, she submits that catering facility in the factory is mandatory as per Factory Act, 1942 where more than 25 persons are employed. In the appellants factory since 25 persons are employed, it is mandatory requirement to maintain the canteen therefore the Cenvat credit should be allowed. She also submits that out door catering expenses are forming part of cost of production; therefore it is in relation to the business. She submits that Cenvat Credit on out door catering has been allowed by this Honble Tribunal in their own case for different period vide order No. A/257/10/SMB/C-IVdated 17/6/2010. She submits that the said Tribunal judgment passed taking into consideration the Judgment of [2010-TIOL-27-CESTAT-MUM] ISMT Ltd. Vs. CC. Ex., and [2008(89)RLT 197(CESTAT-LB) CC. Ex., Mumbai Vs. GTC Industries Ltd. As regard gardening maintenance service also, Cenvat Credit was allowed in their own case in the same order dated 17/6/2010. As regard the guest house maintenance service, she submits that guest house is maintained for the business guests of the appellant. It is in relation to the business activity of the appellant, therefore it is admissible input service. She relies upon the judgment of [2011(22) STR 89(Tri. Mumbai)] Loreal India Pvt. Ltd. V/s. CCE wherein it was held that house keeping of guest house is availed by the assessee in the course of their business activity, hence allowed. She also placed reliance on [2010(19)STR 251(Tri Chennai)] Rane TRW Steering Systems Pvt. Ltd. V/s. CCE. As regard security service provided to the Directors bunglow, she submits that directors bunglow belong to the appellant. In fact a small office is also located in directors Banglow. The security charges are also forming part of administration expenses of the appellants company, therefore the security service used in overall business activity of the appellant. hence the same is admissible. She also placed realiance on following judgments:-

(a) [2010(260)ELT 369(Bom)] CCE V/s. Ultratech Cement Ltd.

(b) [2010-TIOL-CESTAT-MUM0 M/s. Larsen & Toubro Ltd. Vs. CCE & C

(c) [2009(13)STR 616 (Tri. Mumbai) Milipore India Ltd. V/s. CCE

(d) 2012(26)STR 514(Kar.) CCE V/s. Milipore India Pvt. Ltd.

(e) [2010(18) STR 600(Tri. Mumbai)] Bal krisha Industries V/s. CCE

(f) [2012(276) ELT 94(Tri. Mumbai) SEMCO Electric Pvt. Ltd. V/s. CCE

(g) [2012 (28) STR 191(Tri.Mumbai) CCE & ST (LTU) V/s. Lupin Ltd.

(h) [2009 (16) STR 704 (Tri. Bang.) CCE V/s. Hindustan Zinc Ltd.

3. On the other hand, Shri. N. Prabhudesai, Ld. Superintendent (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that there are various contrary judgments according to which Cenvat Credit is not admissible to the appellant which are cited below:-

(a) [2012(277)ELT 218(Tri-Mum) Vikram Ispat Vs. CCE, Raigad

(b) [2013(32)STR650(Tri. Bang) IFG Industries ltd. Vs. Ultratech Cement Ltd.

(c) [2011(268)ELT 86 (Tri Chennai) Stanadyne Amalgamations Pvt. Ltd.

(d) [2014(34)STR 70(Tri Mum) CCE Vs. Motherson Sumi Systems Ltd.

(e) [2010(19) STR 172(Tri- Chennai) CCE Vs. Sundaram brake Linings

(f) [2011(270) ELT 111(Tri-Del) Hindustan zinc Ltd. Vs. CCE

(g) [2010(20) STR 456 (Bom)] CCE Vs. manikgarh Cement

(h) [2011(23) STR 273(Tri-Chenni) CCE Vs. Sri Rama Vilas Service Ltd.

(i) [2011(21) STR 378(Tri- Chennai)] CCE Vs. Grasim Industries

(j) [2011(22)STR 610 (Guj) CCE Vs. Gujarat heavy Chemicals

4. I have carefully considered the submissions made by both the sides and perused the record.

5. There are various conflicting judgments by various Honble Courts and Tribunal. However, I find that in the case of appellant, itself, this Tribunal has allowed the Cenvat credit in respect of input service namely out door catering and gardening maintenance services following the judgment of ISMT Ltd. Vs. CC. Ex.,(supra). It was confirmed with the Ld. Counsel that this judgment of 2010 has not been appealed against by the Revenue, accordingly it attained finality. I therefore respectfully following this Tribunal order dated 17/6/2010 in the appellants own case, allow the Cenvat credit in the respect of out door catering service and gardening maintenance service. As regard security service provided for security of Directors buglow. Though the Ld. Counsel relied upon judgment of CCE V/s. Hindustan Zinc Ltd(supra) in their support but in the judgment of CCE Vs. Gujarat heavy Chemicals(supra) of Gujarat High Court, it was held that the security service is provided at residential quarters maintained for workers are not admissible input service. Following above judgment of Honble Gujarat High Court, I hold that Cenvat Credit in respect of security services provided to the Directors Bunglow is not admissible. As regard guest house maintenance service I observed that guest house is maintained for staying the business guest which is part of the business activity of the appellant. The claim of the appellant is supported by judgment in the case of Loreal India Pvt. Ltd. V/s. CCE (supra). I, therefore held that Cenvat Credit on the guest house maintenance service is admissible.

The appeal is partly allowed in the above terms.

(Operative part of the order pronounced in the Court on /2/2015)

Ramesh Nair Member (Judicial))

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