Cenvat credit on factory cleaning services allowed where the services were used to meet a statutory factory-cleanliness obligation.

Cenvat credit was held admissible on service tax paid for factory cleaning services used to satisfy the assessee's statutory obligation to keep the factory clean under the Factories Act. The denial was found unsustainable because the order did not make a proper factual determination of the area attributed to technical and administrative staff and was therefore vague. As the cleaning services were used for compliance with a legal duty, the stated ground for rejecting credit could not stand. The assessee was held entitled to the credit claimed.

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Issues: Whether Cenvat credit was admissible on service tax paid on factory cleaning services used to discharge the assessee's statutory obligation to keep the factory clean.

Analysis: The statutory duty to keep the factory clean under the Factories Act required the cleaning services. The denial order did not properly determine the area attributed to technical and administrative staff and was therefore found to be vague and unsustainable. Since the service tax had been paid on a service used for compliance with the statutory obligation, the credit could not be denied on the stated ground.

Conclusion: Cenvat credit on factory cleaning services was admissible and the denial was unsustainable.

Final Conclusion: The appeal succeeded and the assessee was held entitled to the credit claimed.

Ratio Decidendi: Where cleaning services are used to discharge a statutory obligation to keep the factory clean, and the denial of credit is not supported by a proper factual determination, Cenvat credit on the service tax paid for such services is admissible.

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