TaxTMI 
TaxTMI 
2017 (3) TMI 244
X X X X Extracts X X X X
X X X X Extracts X X X X
.... filed a miscellaneous application to receive additional submissions wherein they have requested to consider the judgment laid in the case of Manikgarh Cement which was omitted to be stated in grounds of appeal. 2. On behalf of the Department, the learned AR Shri Guna Ranjan adverted to the definition of input service as it stood prior to 01/04/2011 and submitted that the definition only included the words 'setting up' of factory and does not extend to the construction / setting up of residential colony for the employees of the factory. He relied upon the decision laid in the case of CCE, Nagpur Vs. Manikgarh Cement [2010(20) STR 456 (Bom.)], the decision of the Single Member of the Tribunal in the case of Polylink Polymers....
X X X X Extracts X X X X
X X X X Extracts X X X X
....production of the final products and therefore the respondent is entitled to avail credit on the same. The learned counsel adverted to various decision on the issue as under: a. CCE Vs. ITC Ltd. [2013(32) STR 288 (AP)] b. Reliance Industries Ltd. Vs. CCE [2016(42) STR 457 (Tri. Mumbai)] c. CCE Vs. Bajaj Hindustan Ltd. [2015(40) STR 379 (Tri Del)] d. Coca Cola India Pvt. Ltd. [2009 (15) STR 657 (Bom)] e. Steel Strips Wheels Ltd. Vs. CCE [2016 (42) STR 72 (Tri Del)] f. HCL Technologies Ltd. Vs. CCE [2015(40) STR 1124 (Tri Del)] g. Ramala Sahkari Chini Mills Ltd. Vs. CCE [2016(334) ELT 3 (SC)] 4. The learned counsel pointed out that the decision in the case of Manikgarh Cement was made by relying....
X X X X Extracts X X X X
X X X X Extracts X X X X
..../2011 when the definition of input service during the relevant period had a wide ambit as it included the words 'activities related to business'. The definition which included these words has been discussed in detail by various High Courts. The discussion by the Hon'ble jurisdictional High Court in regard to the maintenance of staff colony in the case of ITC Ltd. (supra) is noteworthy. The relevant para is reproduced below:- 9. The Commissioner's Order-in-Appeal dated 27-5-2008 reflects that he accepted that the efficiency of the employees of an organization would be dependent on various factors, one such being the provision of a housing colony. He further conceded that these facilities would contribute to the enhancemen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....taff colony. I cannot agree with this argument for the simple reason that the definition includes the words setting up of factory. The residential colony is within the factory and it is an activity coming within the concept of business of manufacture. Further, maintenance of staff colony follows after construction of the same. The coordinate Bench of the Tribunal while rendering the judgment in the case of M/s.Reliance Industries Ltd. (supra) has discussed in para 8.2 of the said judgment that the Hon'ble High Court of Bombay while rendering the judgment in the case of Manikgarh Cement (supra) had not taken cognizance of the judgment passed in the case of Coca Cola India Pvt. Ltd. It was also noted that in the judgment of Manikgarh Ceme....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or at the appellate stage. There being no dispute that the factory township expenses incurred form a part of the cost of production and consequently applying the ratio laid down by the Hon'ble Bombay High Court in the case of Coca Cola and that of the Karnataka High Court in the case of Milipore India Pvt Ltd., credit of the service tax paid on such services is admissible as the said services used by the manufacturer indirectly, in relation to manufacture of the final products. It is relevant to note here that factories are generally set up at remote locations which are several 100 kilometres away from big towns and cities. Given this fact most companies are compelled to create an integrated township with the factory, either in the same cam....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ded in the cost of the final product and considered for arriving at assessable value. In the absence of any such proposition from the Counsel, their Lordships had taken a view which is correct in the facts and circumstances of that case, while the case in hand before us, the issue seems to be now squarely covered by the judgment of the Hon'ble High Court of Bombay in the case of Coca Cola India Pvt. Ltd. We find strong force in the contentions raised by the learned Counsel that the Hon'ble High Court in the case of Manik-garh Cement (supra) had not decided the issue, as it was never raised before them i.e. cost of setting up of the township/colony and the maintenance cost thereof is included in the cost of production for arriving at assessa....