M/S. Hindustan Coca-Cola Beverages ... vs Cce, Jaipur

[Arising out of Order-in-Appeal No. 177 (VC) CE/JPR-I/2013 dated 05.12.2013 passed by the Commissioner (Appeals-I) Customs and Central Excise, Jaipur]

For approval and signature:

HONBLE 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?

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M/s. Hindustan Coca-Cola Beverages Pvt.Ltd. Appellant

Vs.

CCE, Jaipur  Respondent

Present for the Appellant : Shri Bimal Jain, CA

Present for the Respondent: Shri Devender Singh, DR

Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)

Date of Hearing/Decision: 04.06.2015

FINAL ORDER NO. 53276-53277/2015

PER: S.K. MOHANTY

Denial of cenvat credit of service tax paid on manpower services for the purpose of maintenance of garden by the appellant is the subject matter of present dispute.

2. The ld. Chartered Accountant Shri.Bimal Jain, appearing for the appellant submits that the impugned service has been utilised by the appellant to maintain the garden located within the factory. He further submits that maintenance of garden is a statutory requirement under the pollution control standards prescribed by the State Government. In this context, he refers to the consent letter dated 31.10.06 issued by Rajasthan State Pollution Control Board to the appellant. In the said letter, while granting consent to operate under Prevention and Control of Pollution Act 1974, the statutory authorities have imposed the condition that 33% of the total area of factory premises shall be covered by the tree plantation. Further, the said letter also stipulates that for non-compliance of any of the condition contained therein would tantamount to revocation / withdrawal of the consent to operate the factory. Thus, according to the ld. Chartered Accountant, since utilisation of the disputed service is in relation to observance of the statutory mandates, Cenvat credit of service tax paid on such service is eligible to the appellant. To support his above stand, the ld. Chartered Accountant relies on the decision of this Tribunal in the case of Hindustan Zinc Ltd. Vs. CCE, Jaipur, reported in 2013 (288) ELT 406 (Tri.-Del.).

4. Per contra, the ld. JCDR Shri Devender Singh, appearing for the respondent submits that maintenance of garden has no nexus with the manufacture of finished product, and as such, Cenvat credit on the disputed service is not available to the appellant. To justify his above stand, the ld. DR relies on the decision of Tribunal in the case of Stanadyne Amalgamations Pvt. Ltd., reported in 2011 (268) ELT 86 (Tri.Chennai) and CCE, Trichy vs. Grasim Industries, reported in 2011 (21) STR 378 (Tri. Chennai).

6. I find that the issue involved in the present case regarding eligibility of cenvat credit on the manpower services for maintenance of garden within the factory is no more res-integra in view of the decision of this Bench of the Tribunal in the case of Hindustan Zinc Ltd. (supra), cited by the appellant. The relevant paragraph in the said decision is extracted herein below:-

5.?I have considered the submissions from both the sides. The definition of input service as given in Rule 2(l) of Cenvat Credit Rules, 2004 during the period of dispute covered the services used by a manufacturer whether directly or indirectly in or in relation to the manufacture of final product and clearance of final product up to the place of removal. In my view this expression would cover not only the services which are directly essential for manufacturing operation but would also cover the services which are indirectly essential for manufacturing operation like the services required for compliance with the statutory provisions. In this case the permission given by the Rajasthan State Pollution Control Board to the appellant for operating zinc smelter plant, was subject to the condition of the appellant maintaining 33% of the area as green cover by tree plantation and on their failure to satisfy this condition, the permission granted was liable to be withdrawn. In view this, the service received by the appellant has to be treated as service necessary for compliance with the statutory provisions subject to which the manufacturing activity had been permitted. The service, in question, is therefore covered by the definition of input service. Therefore the impugned order disallowing the Cenvat credit, is not correct. The same is set aside. This appeal is allowed.

7. The decisions cited by the ld. DR are distinguishable from the facts of the present case. In the case of Stanadyne Amalgamations Pvt. Ltd (supra), the statutory requirement under the pollution Control norms for maintenance of garden was not the issue before the Tribunal. Further, in the case of Grasim Industries (supra), no specific reason has been assigned by the Tribunal as to why service tax paid on the maintenance service shall not be eligible for cenvat credit. Since, the issue in hand is squarely covered by the decision in the case of Hindustan Zinc (supra) , I am of the considered view that the appellant shall be eligible for cenvat credit of service tax paid on manpower supply service, utilized for maintenance of the gardens within the factory.

8. In view of above, I do not find any merits in the impugned order, and thus, the same is set aside and the appeals are allowed in favour of the appellant.

(Dictated and pronounced in the open Court)

(S.K. MOHANTY)

MEMBER (JUDICIAL)

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