Cenvat credit on factory housekeeping services allowed, driver-supply credit remanded, and penalty set aside in an interpretative dispute.

Housekeeping services used for factory cleaning and maintenance were treated as input services because the cleaning obligation under the Factories Act formed part of the manufacturing activity, so Cenvat credit was admissible. Credit on supply of drivers under manpower supply service could not be conclusively determined on the available record, so the issue was remanded for fresh factual examination and decision on merits. As the dispute was treated as interpretative, penalty was found unsustainable and was set aside.

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Issues: (i) Whether cenvat credit was admissible on housekeeping services used for factory cleaning and maintenance; (ii) whether cenvat credit on supply of drivers under manpower supply service was admissible, and whether penalty was sustainable.

Issue (i): Whether cenvat credit was admissible on housekeeping services used for factory cleaning and maintenance.

Analysis: Cleaning and maintenance of the factory were treated as a statutory obligation under section 11 of the Factories Act, 1948. Services used to discharge that obligation were held to be used in relation to the manufacturing activity, and the issue was found to be covered by earlier Tribunal and High Court decisions allowing such credit.

Conclusion: Cenvat credit on housekeeping services was held admissible, in favour of the assessee.

Issue (ii): Whether cenvat credit on supply of drivers under manpower supply service was admissible, and whether penalty was sustainable.

Analysis: The record did not contain sufficient evidence to conclusively establish either the admissibility or inadmissibility of the credit on driver supply service. In the absence of proper material, the issue was sent back for fresh factual examination and decision on merits. Since the dispute was treated as interpretative, penalty was held unwarranted.

Conclusion: The issue of credit on driver supply service was remanded, and the penalty was set aside, in favour of the assessee.

Final Conclusion: The assessee succeeded on housekeeping credit, obtained remand on the driver-supply credit issue, and secured deletion of penalty.

Ratio Decidendi: Services used to discharge a manufacturer's statutory factory-cleaning obligation can qualify for credit as input services, while a disputed credit issue lacking adequate evidence may be remanded for fresh adjudication and penalty may be set aside where the dispute is interpretative.

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