2017 (10) TMI 281 - AT - Central Excise

Tribunal allows credits for vehicle, garden, insurance services pre-2011, sets aside windmill service demand

The tribunal allowed the Cenvat Credit for vehicle maintenance, insurance, and garden maintenance services for the period before 01/04/2011, deeming them ... CENVAT credit - Catering/Meal Services - Vehicle Maintenance Service - Insurance Service of Vehicle - Garden Maintenance Service - Servicing of Windmill at the site at Satara - dispute is for the period 01/04/2011 - Held that: - the Hon’ble High Court of Mumbai in the case of Ultratech Cement [2010 (10) TMI 13 - BOMBAY HIGH COURT] has held that the Cenvat Credit on catering services received will be allowed to the extent that the burden of the said service is borne by the respondent. Following the decision of the Hon’ble High Court of Bombay, the credit of the said service is allowed to the extent that the cost of such service is borne by the respondent - credit allowed. CENVAT credit - Vehicle maintenance service - vehicle insurance service - garden maintenance services - Held that: - Vehicle maintenance service, vehicle insurance service and garden maintenance services are the activities related to the business of the respondent and for the period prior to 01/04/2011, the same would be admissible - demand set aside. CENVAT credit - repair and maintenance service of windmill - Held that: - In so far as the repair and maintenance service of windmill is concerned, the same is admissible to the appellants if the electricity generated by the said windmill is used for the process of the manufacture in the factory - matter on remand. Appeal allowed in part and part matter on remand. Issues:- Admissibility of Cenvat Credit for various services including catering/meal services, vehicle maintenance service, insurance service of vehicle, garden maintenance service, and servicing of windmill.- Applicability of Cenvat Credit for the period before and after 01/04/2011.- Interpretation of input services related to the manufacturing process.- Determining the eligibility of Cenvat Credit based on the usage of electricity generated by windmills.Analysis:1. The appeal was filed against the dropping of demand of Cenvat Credit for M/s. Classic Stripes Pvt. Ltd. The Revenue contested that certain services like vehicle maintenance, insurance, and garden maintenance were not admissible post 01/04/2011, despite being allowed for the period before that date. The Commissioner (Appeals) relied on previous tribunal decisions to support the allowance of credit for certain services.2. The respondent argued that they were not claiming Cenvat Credit for services post 01/04/2011, except for catering services where the cost was borne by them. They justified the eligibility for vehicle maintenance, insurance, and garden maintenance services as necessary for business activities and directly related to manufacturing processes.3. The tribunal found that the respondent was not claiming credit for certain services post 01/04/2011, except for catering services where the cost burden was on them. The tribunal referred to a High Court decision to support the allowance of credit based on cost-sharing for catering services.4. The tribunal upheld the admissibility of vehicle maintenance, insurance, and garden maintenance services for the period before 01/04/2011, considering them essential for business activities. The eligibility for windmill services was contingent upon the usage of electricity generated for manufacturing processes, as per tribunal and High Court decisions.5. The demand was set aside for vehicle maintenance, insurance, and garden maintenance services. The tribunal allowed the credit for canteen services where costs were borne by the appellant. The matter regarding windmill services' eligibility was remanded to ascertain the usage of electricity generated. The appeal was partly allowed based on the above terms.