Cenvat credit on garden maintenance and compound wall construction upheld as input services linked to factory compliance and protection.

Services used for maintaining and developing the factory garden, including pest control and manpower support, were treated as input services because the assessee was under an environmental condition to keep a specified green cover around the premises; credit was therefore admissible. Construction services for the factory compound wall were also held eligible because the wall was necessary for demarcation of the registered factory and for safeguarding goods against pilferage and clandestine removal, making it an activity in relation to manufacture. On both counts, the denial of Cenvat credit was set aside and the assessee succeeded on the merits.

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Issues: (i) Whether cenvat credit was admissible on services used for maintenance and development of the garden around the factory premises, including pest control and manpower supply for such maintenance; (ii) Whether cenvat credit was admissible on construction services used for construction of the compound wall of the factory.

Issue (i): Whether cenvat credit was admissible on services used for maintenance and development of the garden around the factory premises, including pest control and manpower supply for such maintenance.

Analysis: The appellant was under an environmental condition to maintain a specified portion of the factory area as green cover to mitigate emissions. Services used for garden development and maintenance were therefore connected with compliance of that condition and with the functioning of the factory. Manpower engaged for maintaining the landscape stood on the same footing. Such services fell within the scope of input services.

Conclusion: Cenvat credit on garden maintenance, pest control and related manpower services was held admissible in favour of the assessee.

Issue (ii): Whether cenvat credit was admissible on construction services used for construction of the compound wall of the factory.

Analysis: The compound wall was treated as necessary for demarcation of the registered factory and for safeguarding manufactured goods against pilferage and clandestine removal. It was regarded as an essential element for completion and functioning of the factory and as an activity in relation to manufacture. Construction services used for such wall therefore qualified as input services under the credit rules.

Conclusion: Cenvat credit on construction services for the compound wall was held admissible in favour of the assessee.

Final Conclusion: The denial of cenvat credit on both categories of services was set aside and the assessee succeeded on the merits of the appeal.

Ratio Decidendi: Services integrally connected with factory obligations, environmental compliance, protection of goods, and the functioning or completion of the factory constitute input services eligible for cenvat credit.

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