Cenvat Credit Allowed for Service Tax on Manpower Supply and Recruitment Services Under Input Service Rules

The CESTAT Ahmedabad allowed the appeal, holding that Cenvat credit for service tax paid on Manpower Supply Services, including Labour Supply, Recruitment Agency, and Housekeeping, is admissible. The Tribunal relied on precedent affirming that such services are used in manufacturing and related activities, and Manpower Recruitment Service falls within the inclusion clause for input services. The decision also referenced CESTAT Chennai's ruling that Group Insurance and Manpower Supply services relate to manufacturing costs, supporting credit availability. Consequently, the impugned order denying credit was set aside.

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ISSUES:

Whether Cenvat credit of service tax paid on "Manpower Supply Service" (including Labour Supply, Recruitment Agency & Housekeeping) is admissible under the definition of 'Input Service'.Whether the appellant's failure to produce documentary evidence as per Rule 9(6) of Cenvat Credit Rules affects eligibility of credit on Manpower Supply Services.Whether Manpower Recruitment Service is covered under the inclusion clause of the definition of 'Input Service' for the purpose of Cenvat credit.

RULINGS / HOLDINGS:

The Court held that the service of 'Manpower Recruitment and Supply Service' is covered under the inclusion clause of the definition of 'Input Service' and is therefore an admissible input service.The failure to produce documentary evidence under Rule 9(6) does not preclude credit when the service is otherwise covered under the definition of input service and used in manufacturing activities.The Tribunal set aside the impugned orders denying credit and allowed the appeals, stating that "even by stretch of imagination, if found that Manpower Supply Service is not directly used in the manufacture, even then in terms of the Recruitment Service covered under inclusion clause, credit is otherwise admissible."

RATIONALE:

The Court applied the legal framework under the Cenvat Credit Rules, particularly the definition of 'Input Service' which includes services used in or in relation to manufacturing.Precedents from the same Tribunal and other benches were relied upon, including a prior decision in the appellant's own case and the decision in Commissioner of Central Excise, Chennai-II v. Carboline (India) Pvt. Limited, which recognized the relevancy of Manpower Supply services to manufacturing and the inclusion of their cost in the manufactured product.The Tribunal emphasized that Manpower Recruitment Service is explicitly covered under the inclusion clause of the definition of 'Input Service', marking a settled legal position and doctrinal consistency.

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