CENVAT Credit on Safety Shoes

[Pradeep Jain]

Dear Sir,

CENVAT credit  can be taken on Safety Shoes provided to Factory Staff and Workers, to fulfil to Safety norms.?

Please provide the expert advise.

Regards

Pradeep Jain

[YAGAY andSUN]

Safety Helmets, Gloves and Safety Shoes do fall under the catergory of inputs and CENVAT credit would be available on the same since it is being used by the worker at shopfloor to handle risky jobs.

[CASeetharaman KC]

Under Rule 2 (k) of Cenvat Credit  Rules, 2004 Input has been defined and it also includes:

1. All goods used in the factory by the manufacturer of the final product

2. any goods, such as food items, goods used in a guesthouse, residential colony, club or a recreation facility and clinical establishment, when such goods are used primarily for personal use or consumption of any employee

Safety Equipments would come under one of these categories and would be eligible for CENVAT credit

[venkat Narayan]

Dear Pradeep Jain,

Please refer the following case law.

2014 (1) ECS (140) (Tri – Del.)

 

Customs, Excise and Service Tax Appellate Tribunal

West Block No. II, R.K. Puram,

New Delhi - 110066

COURT NO. II

Date of Hearing/Decision:19.07.2013

 

M/s STEEL AUTHORITY OF INDIA LTD.Vs.CCE and C, RAIPUR

 

 

Stay Application No. E/Stay/57921/2013 in Central Excise appeal No.57321/2013 - SM

 

(Arising out of Order–In–Appeal No. 06/RPR-II/2012 dated 01.02.2013 passed by Commissioner (Appeals–II), Central Excise and Customs, Raipur)

Appearance:

 

Ms. Jeny, Advocate For the Assessee

 

Ms. S. Bector, A.R. For the Revenue :

 

CORAM:

 

Hon’ble Shri D.N. Panda, Judicial Member

 

FINAL Order No. 57048/2013

 

“Use of such shoes is indispensable necessity for iron and steel factorywhere workers move on hot plates. Ensuring health of workers is mandate

of section 7A(2)(c) of the Factories Act, 1948. Once the indispensablenecessity is the requirement of welfare legislation and that is also a

Central legislation, object thereof cannot be defeated.” (Para 4)

 

Per: D. N. Panda, Mr. :

 

Learned Counsel justify use of shoes by the workers as norms to fulfill the requirement of Factories Act, 1948. She says that without safety shoes 

being worn the workers cannot work in the hot steel plant in Iron and Steel factory of SAIL. Learned Commissioner (Appeals) did not appreciate such

an essential requirement of law for which he disallowed CENVAT credit.

 

2. Revenue’s submission is that when the goods in question was notused in or in relation to manufacture, dis–allowance is justified.

 

3. Heard both sides and perused the record.

 

4. The only reason for disallowance is that safety shoes are not used in the manufacture. No doubt it is not a capital goods but without shoes being worn by the workers carrying out manufacture activity 2014] 141 is difficult. Therefore, use of such shoes is indispensable necessity

for iron and steel factory where workers move on hot plates. Ensuring health of workers is mandate of section 7A(2) (c) of the Factories Act,1948. Once the indispensable necessity is the requirement of welfare legislation and that is also a Central legislation, object thereof cannot be defeated. Such a spirit was also conveyed by Hon’ble High Courtof Bombay in the case of CCE, Nagpur vs. Ultratech Cement Ltd. –[2010 (260) ELT 360 (Bom.)] and Hero Motorcorp Ltd. vs. CCE –[2012 (286) ELT 579 (Tri.-Del.).] Keeping the aforesaid merit in view,both stay application and appeal are allowed.

 

(Dictated and pronounced in the Open Court).

[YAGAY andSUN]

Dear Venkat,

Thanks for your valuable contribution on this matter, even after a long time. We had also conveyed the same views to Mr. Pradeep Jain.

It is worthwhile to mention here that "Knowledge is power, when shared"

Regards

YAGAY and SUN

(Management and Indirect Tax Consultants)

AI Summary

CENVAT Credit Eligible for Safety Shoes as Inputs Under Rule 2(k) of Cenvat Credit Rules, 2004 A query was raised about the eligibility of CENVAT credit for safety shoes provided to factory staff and workers to meet safety norms. Respondents clarified that safety equipment, including shoes, helmets, and gloves, qualify as inputs under Rule 2(k) of the Cenvat Credit Rules, 2004, and are eligible for CENVAT credit. A referenced case from the Customs, Excise, and Service Tax Appellate Tribunal emphasized that safety shoes are essential for worker safety in factories, aligning with welfare legislation under the Factories Act, 1948. The discussion underscored the importance of sharing knowledge in legal and tax matters.