M/S.Japee Sidhi Cement Plant vs C.C.E. & S.T., Bhopal

[Arising out of Order-in-Appeal No.BPL-EXCUS-000-APP-040-14-15 dated 20.05.2014 passed by the Commissioner (Appeals), CCE& ST, Bhopal]

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?

M/s.Japee Sidhi Cement Plant Appellant

Vs.

C.C.E. & S.T., Bhopal  Respondent

Present for the Appellant : Ms. Nupur Maheshwari, Advocate

Present for the Respondent: Shri Devender Singh, D.R.

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

Date of Hearing/Decision: 05.08.2015

Final ORDER NO. 54121/2015

PER: S.K. MOHANTY

This appeal is directed against the impugned order dated 20.05.2014 passed by the Commissioner (Appeals), Customs and Central Excise, Bhopal, wherein cenvat credit taken on input service in respect of medical services including remunerations paid to Doctors Nursing Staff and also the cost of medicines by the appellant has been denied on the ground that said service has no nexus with the manufacture of final product.

2. The ld. Advocate Ms. Nupur Mahaswari appearing for the appellant submits that during the relevant period, the appellant had filed cenvat credit on input services under the category of supply of manpower received from Jaypee Industrial and Medical Services for supply of Doctors and Nursing staffs to run the hospital maintained by the appellant. Ld. Advocate further submits that section 46 (4) of the Factories Act, 1948 and section 21 (5) of the Mines Act, statutorily provides that medical and nursing facilities should be provided by the employer in the factory. She further submits that since maintenance of the medical facility which adequate numbers of Doctors/nursing staff, are the statutory requirement, but service tax paid on the category of manpower supply service shall be eligible for cenvat credit to the appellant. In this contest, the ld. Advocate has cited the decision of this Tribunal in the case of appellant itself reported in 2015 (37) STR 379 (Tri.-Delhi). The relevant paragraph of the said decision is extracted wherein below:-

5.?Providing of first-aid facilities to the workers, whether in the factory or in mines is the requirement of the Factories Act, 1948 and also the Mines Act, 1952 and if a manufacturer wants to carry on manufacturing activities, he has to comply with the provisions of the Factories Act and the Mines Act. In view of this, the availment of service for maintenance of the first-aid facilities for the workers has to be treated as the service used in or in relation to the manufacture of final products. I find that the same view has been taken by the Honble Gujarat High Court in the case of Ferromatik Milacron India Ltd. (supra). In this regard, Paras 5 and 6 of this judgment are reproduced below :-

5.?Input Service is defined under Rule 2(l) of the Rules, which insofar as the same is relevant for the purpose of the present appeal, reads thus :

(l)?input service means any service, -

(i) xxxx

(ii) used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes the services in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal;

3. The ld. JCDR Shri Devender Singh appearing for the respondent reiterates the findings recorded in the impugned order and also relies on the decision of the Tribunal in the case of M/s.JSW Steel Ltd. vs. Commissioner of Central Excise, Thane-I reported in 2012 - TIOL  421-CESTAT Mum. to justify the stand of Revenue that Cenvat credit is not available on the medical services since the said service has no nexus with the manufacture of the final product. The decisions cited by the Revenue in the case of M/s.JSW Steel Ltd. (supra) is distinguishable from the facts of the present case, inasmuch as, the services on which the cenvat credit has been denied in the said decided case are not required to be utilized as per the statutory requirement under the Factory/ Mines Act.

4. In view of the above settled position of law, I do not find any substance in the impugned order and as such the same is set aside and the appeal is allowed in favour of the appellant.

(Operative part of the order pronounced in the open Court on 05.08.2015)

(S.K. MOHANTY)

MEMBER (JUDICIAL)

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