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of <h1>Court upholds eco-friendly expenses for Cenvat credit eligibility.</h1> <h3>COMMR. OF C. EX. & SERVICE TAX, CHENNAI Versus BRAKES INDIA LTD.</h3> COMMR. OF C. EX. & SERVICE TAX, CHENNAI Versus BRAKES INDIA LTD. - 2019 (369) E.L.T. 577 (Mad.) Issues:Appeal under Section 35G of the Central Excise Act, 1944 against a common order passed by the Tribunal - Interpretation of Rule 2(l) of the Cenvat Credit Rules, 2004 regarding input services - Entitlement to Cenvat credit for maintaining green belt area as per statutory requirements.Analysis:The High Court heard appeals by the Revenue against a common order of the Tribunal. The main issue was whether an activity carried out in compliance with statutory requirements would qualify as an input service under Rule 2(l) of the Cenvat Credit Rules, 2004, even if it lacked a direct connection to the manufacture of the final product. The assessee contended that maintaining plantations as per directions under the Water Act was erroneously considered as gardening services. The Tribunal considered the precedent set by the Division Bench in a similar case and the decision of the Karnataka High Court in Commissioner v. Millipore India Pvt. Ltd. The Court held that expenses incurred to fulfill statutory obligations in an eco-friendly manner would be part of the final product's costs, making the tax paid on such services eligible for Cenvat credit. Consequently, the appeal by the Revenue was dismissed.The Court referenced the Millipore India Pvt. Ltd. case in another judgment and reiterated that expenses for maintaining factory premises as per statutory directives would constitute input services, entitling the assessee to claim benefits. The Court agreed with the Tribunal's decision in favor of the assessee, emphasizing that spending on statutory compliance in an eco-friendly manner would be part of the final product's costs. As a result, the appeal by the Revenue was dismissed, and the substantial question of law was answered in favor of the assessee without any costs being awarded.
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