CENVAT credit on housekeeping and security services is treated as eligible where the services support factory operations and business delivery.

CENVAT credit is stated to be admissible on service tax paid for manpower used in gardening and housekeeping within factory premises, because such maintenance services are treated as input services connected with business operations and forming part of the cost of final products. The same approach is applied to security personnel engaged for protecting goods during delivery and for other business-related security functions, as those services are also described as sufficiently linked to the assessee's business. On that basis, the disallowance of credit, along with the related demand and penalty, is stated to be set aside.

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Issues: (i) Whether CENVAT credit was admissible on service tax paid for manpower used for gardening and housekeeping in the factory premises. (ii) Whether CENVAT credit was admissible on service tax paid for security personnel deputed with goods to customer sites and for business-related security functions.

Issue (i): Whether CENVAT credit was admissible on service tax paid for manpower used for gardening and housekeeping in the factory premises.

Analysis: The admissibility of credit turned on the scope of input services under the CENVAT Credit Rules, 2004. The reasoning accepted that services used for maintaining factory premises in an eco-friendly manner, including housekeeping and landscaping, fall within the ambit of input services as they are connected with business activity and form part of the cost of the final products.

Conclusion: CENVAT credit on manpower used for gardening and housekeeping was held admissible and the issue was decided in favour of the assessee.

Issue (ii): Whether CENVAT credit was admissible on service tax paid for security personnel deputed with goods to customer sites and for business-related security functions.

Analysis: The same broad understanding of input services was applied to security-related manpower. Security personnel engaged in the protection of valuable goods and in assisting safe and timely delivery were treated as services sufficiently connected with the assessee's business and eligible for credit.

Conclusion: CENVAT credit on security personnel services was held admissible and the issue was decided in favour of the assessee.

Final Conclusion: The disallowance of CENVAT credit and the consequential demand and penalty were set aside, resulting in full relief to the assessee.

Ratio Decidendi: Services used for maintenance of factory premises or for business-connected security and delivery support qualify as input services when they have a nexus with business operations and contribute to the cost of the final products.

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