TaxTMI 
TaxTMI 
2018 (5) TMI 411
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....erification of ST-3 returns for the period October 2007 to September 2008, it was noticed that the assessee had availed input service tax credit in relation to construction of guest house, residential complex, school building, service of vehicle maintenance and repair, insurance service for vehicles etc. which according to the department was not eligible for credit as per definition of input services contained in Rule 2(l) of CENVAT Credit Rules, 2004. Show cause notice was issued proposing to disallow the credit and to recover the same along with interest and for imposing penalties. After due process of law, the adjudicating authority disallowed the credit and confirmed the demand, interest and imposed penalty. In appeal, Commissioner (Appeals) allowed the credit on vehicle maintenance and repair service, insurance service and also with regard to construction of residential complex. Aggrieved by the disallowance of credit on construction of guest house and construction of school building, the assessee has filed Appeal No. ST/114/2011 before the Tribunal. Against the order of the Commissioner (Appeals) allowing credit on vehicle maintenance and repair service, insurance service and....
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....d repair service as well as insurance service. The period being prior to 1.4.2011, the said input service fall within the ambit of activities relating to business. He relies upon the decision in the case of Commissioner of Central Excise Vs. Ultra Tech Cement - 2010 (20) STR 577 (Bom.), Coca Cola India Vs. Commissioner of Central Excise - 2009 (15) STR 657 (Bom.) and Bajaj Hindustan Ltd. Vs. Commissioner of Central Excise - 2014 (33) STR 305 (Tri. Del.) 5. The ld. AR Shri A. Cletus appeared and argued the matter on behalf of Revenue. He submitted that the Commissioner (Appeals) erred in allowing credit in respect of repair and maintenance service as well as vehicle insurance service. In regard to the credit availed on construction service of residential colony, he submitted that the Commissioner (Appeals) has erred in relying upon the decision in the case of Manikgarh Cement Vs. Commissioner of Central Excise - 2008 (9) STR 554. The credit availed by the assessee is actually on construction service of residential colony whereas the discussion made in para 4.1 of the impugned order is in respect of maintenance and repair service relating to residential colony. The said decision is ....
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....place of removal would be an input service. The 'includes' part is worded in such a way that it takes in a large number of services which includes services used not only directly or indirectly, in or in relation to manufacture of final products and their clearance. The meaning of the word 'includes' was considered by the Hon'ble Apex Court while deciding the interpretation of the said word in the definition of 'inputs' in CENVAT Credit Rules, 2004. In the decision of Ramala Sahkari Chinni Mills Ltd. Vs. Commissioner of Central Excise, Meerut - I - 2010 (260) ELT 321 (SC), the Larger Bench of the Hon'ble Supreme Court observed that the word 'includes' cannot be given a restrictive interpretation. As seen from the definition of 'input service' for the period prior to 1.4.2011, input service included the services used in relation to setting up of factory and also office in relation to factory. The staff colony is situated within the factory premises. The intention of providing such residential facility to the employees is to ensure availability of sufficient number of employees to attend the work in the factory at required time. The Hon'ble High Court of Andhra Pradesh in the case cit....
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....e authority surprisingly took the view that maintenance of the residential colony by the respondent-Company was only an obligatory activity owing to situational exigencies and was not connected either directly or indirectly to the manufacture of its final products This inherent contradiction in the Order-in-Appeal was noted by the CESTAT, which opined that if accommodation was not provided by the respondent-Company to its employees at this remote location, it would not be feasible for it to carry on its manufacturing activity. The finding of the Commissioner that providing a colony to the employees was not directly or indirectly connected with the manufacturing activity of the respondent-Company was therefore not borne out on facts. The staff colony, provided by the respondent-Company, being directly and intrinsically linked to its manufacturing activity could not therefore be excluded from consideration. Consequently, the services which were crucial for maintaining the staff colony, such as lawn mowing, garbage cleaning, maintenance of swimming pool, collection of household garbage, harvest cutting, weeding etc., necessarily had to be considered as 'input services' falling within ....