CENVAT credit on manpower for a mandatory occupational health centre remains admissible where linked to hazardous-factory safety requirements.

CENVAT credit is discussed in the context of manpower supply service used to maintain an Occupational Health Centre in a hazardous factory. The text explains that where factory law and hazardous-waste requirements mandate first-aid and emergency medical facilities, the service has a direct nexus with safe manufacturing operations and remains eligible for credit. It further states that the 2012 exclusion for health services does not apply when the service is inseparably linked to a compulsory workplace safety facility, and the absence of separate emergency records does not break that nexus. On that reasoning, the commentary concludes that denial of CENVAT credit is unsustainable.

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Issues: Whether CENVAT credit was admissible on manpower supply service used for maintaining an Occupational Health Centre in a hazardous factory.

Analysis: The factory was engaged in hazardous manufacture and was required under the applicable factory and hazardous-waste framework to maintain an Occupational Health Centre and provide first-aid and emergency medical facilities. The service in question was used to run that statutorily mandated facility, which had a direct connection with the safe conduct of manufacturing operations. Though health services were brought within the exclusion clause under the 2012 amendment to the CENVAT Credit Rules, the exclusion did not apply where the service was inseparably linked to a compulsory workplace safety requirement for a hazardous factory. The absence of separate emergency records did not alter the character of the facility or break the nexus with manufacture.

Conclusion: CENVAT credit on the manpower supply service was admissible and the denial of credit was unsustainable.

Ratio Decidendi: A service used to maintain a statutorily required occupational health and first-aid facility in a hazardous factory retains sufficient nexus with manufacture and is not excluded from CENVAT credit merely because it also serves general employee health needs.

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