Tribunal grants Cenvat credit for service tax on Manpower Supply in factory premises.

The Tribunal allowed the appeal, setting aside the order denying Cenvat credit for service tax paid on Manpower Supply within the factory premises. It held that the services received had a direct nexus with manufacturing activities, making the appellant eligible for credit under the definition of 'Input Service' in CCR, 2004. The judgment was pronounced by Dr. D. M. Misra, Member (Judicial) of the Appellate Tribunal CESTAT AHMEDABAD.

---

---

Issues:
- Appeal against order-in-appeal denying Cenvat credit for service tax paid on Manpower Supply within factory premises.

Analysis:
The appeal in this case was filed against the order-in-appeal denying Cenvat credit for service tax paid on Manpower Supply within the factory premises. The appellant had availed Cenvat credit of service tax paid on Manpower Supply by a service provider, S. B Sharma & Co., for activities such as shifting finished goods and loading trucks within the factory premises. The dispute arose when a show cause notice was issued alleging that the service did not fall within the scope of the definition of 'Input Service'. The demand was confirmed with interest and penalty, leading to the appeal before the Ld. Commissioner (Appeals), who rejected it, prompting the present appeals.

During the proceedings, the appellant's representative argued that the services received were used within the factory premises and had a direct nexus with the manufacturing activity. It was contended that the service tax paid on Manpower Supply Service by the service provider should be eligible for credit. On the other hand, the Revenue's representative reiterated the findings of the Ld. Commissioner (Appeals).

The Tribunal, after considering the arguments and facts presented, observed that the appellant had indeed received services related to Manpower Supply within the factory premises and utilized these services for activities directly linked to manufacturing, such as shifting finished goods between godowns. Consequently, the Tribunal concluded that there was a clear nexus between the services received and the manufacturing activity, making the appellant eligible for credit within the scope of the definition of 'Input Service' under Rule 2 (l) of CCR, 2004. As a result, the impugned order was set aside, and the appeal was allowed. The judgment was dictated and pronounced in open court by Dr. D. M. Misra, Member (Judicial) of the Appellate Tribunal CESTAT AHMEDABAD.

---