TaxTMI 
TaxTMI 
2011 (4) TMI 201
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....d availed and utilized input service tax credit relating to canteen services. They also noticed that the assessee had availed and utilized the input service tax credit relating to Rent-a-Cab service and on the Group Health Insurance services. Therefore a show-cause notice was issued to the assessee asking him to show cause as to why the total input service credit availed in respect of outdoor catering, Rent-a-Cab Service and Group Health Insurance services should not be treated as wrong availment and utilization of input service credit and the same should not be recovered under Rule 14 of the Cenvat Credit Rules, 2004 and also interest and penalty on the duty leviable. 4. The assessee gave his reply and contended that all those services was availed by the assessee in or in relation to the manufacturing activity and therefore falls within the definition of "input service" and therefore they have rightly availed the benefit of Cenvat credit and they requested for dropping of further proceedings. However, the assessing authority overruling the said objections proceeded to pass an order holding that the assessee has availed and utilized Cenvat credit wrongly and levied duty, interes....
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....and in extending the benefit to the assessee. He also contended that those services are in the nature of welfare measure to the employees and it has nothing to do with the manufacturing activity of the assessee. Therefore he contends that the order of the Tribunal is liable to be set aside and the assessee is liable to pay duty, interest and penalty, in respect of wrong availment of Cenvat credit. 7. Per contra, the learned counsel Sri K.S. Ravishankar, appearing for the assessee contended that all the aforesaid three services are provided by the assessee to its employees and it falls within the definition of input service inasmuch as those services are used by the assessee indirectly or in relation to the manufacture of final products and clearance of final products from the place of removal and it also falls within the phrase "activities relating to business" as contained in the inclusive part of the definition and therefore the Tribunal was justified in setting aside the order passed by the authorities and granting the benefit. He also submits that the Tribunals throughout the Country have taken the said view and therefore no case for interference with the order of the Tribun....
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.... constituting input service. It also includes transportation of inputs or capital goods and outward transportation upto the place of removal. Therefore the test is whether the service utilized by the assessee is for the manufacture of final product. Such service may be utilized directly or indirectly. Such service may be in the nature of transportation of inputs or capital goods, up-to the factory premises or if the final product is removed from the factory premises for outward transportation up-to the place of removal. It is an inclusive definition. The services mentioned in the section are only illustrative and it is not exhaustive. Therefore when a particular service not mentioned in the definition clause is utilised by the assessee/manufacturer and service tax paid on such service is claimed as Cenvat Credit, the question is what are the ingredients that are to be satisfied for availing such credit. If the credit is availed by the manufacturer, then the said service should have been utilized by the manufacturer directly or indirectly in or in relation to the manufacture of final products or used in relation to activities relating to business. If any one of these two tests is sa....
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....on of service and the amounts spent on the conveyance of the employees is also a factor which will be taken into consideration by the employees in fixing the price of the final product. By no stretch of imagination can it be construed as a welfare measure. It is a basic necessity. To ensure that the work force comes on time at the work place, the employers have taken this measure which has a direct bearing on the manufacturing activity. At any rate it is an activity relating to business. Insurance/Health Policy 14. Insofar as Insurance coverage to the employees is concerned in the course of employment if the employees suffer injury or dies, there is a vicarious liability imposed on the employer to compensate the employee. If the employer employs its own transportation facility in order to cover the risk which also includes the risk of workers who are covered in that statutory establishment. He has to take the insurance policy without which the vehicle cannot go on the road. Under the workmen's compensation Act he has to obtain the Insurance Policy covering the risk of the employees. The employee State Insurance Act takes care of the health of the employees also and casts ....