CENVAT credit on garden maintenance upheld where factory operations depended on regulatory consent and manufacturing infrastructure.

Garden maintenance service used in the factory premises was treated as having a direct nexus with manufacture because it was necessary to obtain and renew pollution control consent required for continued production. The Tribunal held that such maintenance formed part of the manufacturing infrastructure and qualified as an input service for CENVAT credit. Credit was therefore admissible, and the related disallowance, interest, and equal penalty were set aside.

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Issues: Whether credit of service tax on manpower supply service used for garden maintenance was admissible as input service, and whether the related interest and penalty could be sustained.

Analysis: The maintenance of the garden in the factory premises was a condition for obtaining and renewing consent to manufacture from the pollution control authorities. Without such consent, manufacture could not be carried on. The garden maintenance service therefore had a direct nexus with the business of manufacture and constituted infrastructure necessary for carrying on manufacturing operations. The Tribunal applied the same principle as in earlier decisions holding that such services qualify as input services for CENVAT credit purposes.

Conclusion: Credit was held admissible, and the disallowance, interest, and equal penalty were set aside in favour of the assessee.

Final Conclusion: The appeal succeeded on the ground that garden maintenance service, being integrally connected with the factory's manufacturing operations and regulatory compliance, qualified for CENVAT credit.

Ratio Decidendi: Services used for maintaining manufacturing infrastructure required by law for continued production have the requisite nexus with manufacture and qualify as input services for CENVAT credit.

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