2018 (3) TMI 1371

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....se notice dated 13/12/2010 for the period December 2009 to August 2010 it appeared by the Revenue that the appellant had taken and utilized Cenvat credit of Rs. 74,170/- of service tax paid on security services used at residential colony (search places far away and other manufacturing area) it appears to be not covered under the definition of input services in contravention of the Cenvat Credit Rules, 2004. As it appear from the Revenue that with the lack of efforts with the manufacturing/business activity of the appellant, the said Cenvat credit is not allowable under Rule 2 (l) of Cenvat Credit Rules, 2004 and accordingly it proposed to disallow the same under Rule 14 readwith Section 11A (1) and 11AB of the Act. Further, penalty was also....

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....t the transaction is properly recorded in the books of account maintained on order to course of business and as such there is no basis for allegation of Revenue as records concealment, misstatement, suppression of facts etc. 4. The show cause notice was adjudicated with order-in-original dated 17th January 2011 and the proposed demand was confirmed by disallowing the Cenvat credit and availed alongwith penalty of Rs. 5,000/- under Rule 15 (2) readwith Section 11AC of the Act observing that service tax paid on security provided to plant is admissible the security service provided to residential colony is still admissible is arguable. The security of residential colony is only obligatory and no way concerned directly or indirectly with the m....

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.... dutiable final product. It is further avoid that the factory rounds and round the clock and shall be changed odd hours unless the person is available near to the factory the final dutiable goods cannot be manufactured. Accordingly, there is a indirect nexus for manufacture of dutiable final products and, as such, as defined under the provision of Rule 4 (l) of Cenvat Credit Rules, 2004 the Cenvat credit is available. The learned Counsel also placed to reliance on the ruling of Hon'ble Andhra Pradesh High Court in CCE, Hyderabad - III Vs. ITC Limited - 2013 (32) S.T.R. 288 (A.P.). The learned Counsel also points out that the ruling of Hon'ble Andhra Pradesh High Court was followed and their appeal allowed with respect to similar dispute bei....

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....lony established for the employees and rendering taxable services in that residential colony may be a welfare activity undertaken while carrying on the business and such an expenditure may be allowable under the Income Tax Act. However, to qualify as an input service, the activity must have nexus with the business of the assessee. The expression 'relating to business' in rule 2 (l) of Cenvat Credit Rules, 2004 refers to activities which are integrally related to the business activity of the assessee and not welfare activities undertaken by the assessee. 8. Having concrete rival submissions and case laws and the facts on record, I find that the finding of the Adjudicating Authority that the colony is located away from manufacturing area and....