TaxTMI 
TaxTMI 
2012 (11) TMI 741
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....king service, Pest Control services were utilised in the appellant's staff colony, guest house and sport complex. He submits that the factory of the appellant is located in a remote place in Ankleshwar and appellant is engaged in the manufacture of Glass. For manufacture of glass, melting sand etc, furnace is used and furnace once it is started, it is not stopped in its life time and it is quite normal for the furnace to function 15 to 20 years before it is stopped for maintenance or repairs. Under these circumstances, since the factory, has to function continuously throughout the year without getting stopped any time and when the factory is located in a remote area, it becomes essential to establish residential colony so that staff is available 24 hours near the factory and they also have necessary facilities to make their stay comfortable so that their factory can run efficiently. Under these circumstances, the stand taken by the Revenue that it has no nexus with the manufacture and input service has to have a nexus with the manufacture and therefore credit is not admissible, is not correct. In this case, it is his submission that manufacture in this case cannot be done efficient....
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.... whether the service is an input service under the facts and circumstance in each case and thereafter decide the eligibility. According to him, the two decisions in the case of Manikgarh Cement and Gujarat Heavy Chemicals Limited do not have precedence value in this case because in this case, it has been the submission of the appellant that what was undertaken was not welfare activity but was a necessity for manufacture and business of the assessee. 3.3. Learned counsel would rely upon the decision of the Tribunal in the case of ITC Limited - 2010 (17) STR 146 (Tri.-Bang.) where the Tribunal took the view that credit of service tax on various services provided in the staff colony is admissible in view of the fact that manufacture was not feasible if residential colony for employees is not provided near the factory. He submits that decision in the case of ITC Limited is directly applicable to the facts of this case. He also relied upon the decision of the European Court in the case of Julius Fillibeck Sohne Gmb H & Company KG to submit that activity undertaken is necessary for the requirement of business, service received has to be held as one received for business purpose. He re....
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....would submit that decision of the Hon'ble Supreme Court in the case of Maruti Suzuki ltd makes it very clear that there has to be nexus between manufacture and input service. Further, he submits that in the case of Gujarat Heavy Chemicals Limited and Manikgarh Cement, the Hon'ble High Courts were aware that residential colony would have been established because the employees may be required in the same area. Just because of this fact they have not been mentioned in the decisions does not mean that courts were not aware of the facts. He submits that residential colony for whatever purpose is established cannot be said to have a nexus with the manufacture and therefore, credit cannot be allowed in such a situation. 5. I have considered the submissions made by both sides. First of all, the submission that creation of residential colony need not be a welfare activity in all cases and it has to be considered in each case cannot be found fault with. I also agree with the submission of the learned advocate that decision as to whether the input service can be considered as input service, is a question of fact. Therefore, first of all it becomes necessary to decide whether this can be co....
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....t specifically say that it is a welfare activity or voluntary only, credit has to be denied. As regards the decision of the European Court, unless it is examined the decision vis-a-vis the definition of input service and statutory provisions, it would not be appropriate to adopt the ratio. As regards the decision in the case of ITC Limited, it has to be noted that decision was rendered much before the subsequent decisions of the Hon'ble High Courts cited before me. Therefore, tribunal did not get benefit of these decisions at that time. It has to be noted that while rendering the decision in the case of Gujarat Heavy Chemicals, the decision of Karnataka High Court in the case of Toyota Kirloskar Limited was not available. However, decision in the case of Gujarat Heavy Chemicals is a subsequent decision and it is to be noted that Hon'ble Gujarat High Court had taken note of the decision in the case of Ultratech Cement, Manikgarh Cement to come to the conclusion that credit is not admissible. In the case of Ultratech Cement, view taken was that where there is legal compulsion, credit has to be allowed. In the case of Manikgarh Cement, it was held that in case of welfare activity cred....