TaxTMI 
TaxTMI 
TaxTMI 
2026 (2) TMI 394
X X X X Extracts X X X X
X X X X Extracts X X X X
....ical services for employees; (v) civil/works contract services (earth pits, manholes, STP, canteen/gas bunk renovation); (vi) servicing of canteen equipment/Sodexo meal pass booklets; (vii) transport-coordination services, etc. 2.2 Four Show Cause Notices were issued on the grounds of availment of ineligible CENVAT Credit. The period of dispute is April 2010 to March 2015. The Adjudicating Authority vide Order in Originals No 464-467/2015-ADC dated 30.10.2015 confirmed recovery of CENVAT credit (under Rule 14 CCR) with interest and imposed penalties under Rule 15 CCR. Aggrieved, the Appellant filed Appeal before the Commissioner (Appeals), who after due process of Law rejected the Appeal. 2.3 Once again aggrieved, the Appellant challenges the Impugned Order before this Tribunal. 3. The Ld. Advocate Mr. Joseph Prabakar appeared on behalf of the Appellant and advanced detailed submissions in support of the Appeal and the Ld. Authorized Representative Mr. M. Selvakumar, appeared for the Revenue and defended the Impugned Order. 4. The Ld. Advocate Mr. Joseph Prabakar, appeared for the Appellant and made the following submissions which are summariz....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ke Linings. It was contended that several disputed services, such as escort/security provided beyond the place of removal and collection of C-Forms/payments, are clearly post-removal activities and therefore not eligible for credit. The learned A.R. further argued that with effect from 01.04.2011, specific statutory exclusions were introduced in Rule 2(l) covering services such as medical, canteen, employee transportation and outdoor catering, rendering credits taken thereafter inadmissible. It was also submitted that works contract and construction services relating to canteen, STP and gas bunk renovations are expressly excluded under the amended definition. Accordingly, it was urged that the denial of credit, along with imposition of interest and penalty, was justified and required no interference. 6. We have carefully heard the submissions advanced by both sides, examined the appeal records in detail, considered the statutory provisions, notifications and circulars and the case Laws cited. 7. Upon such comprehensive consideration, the following issues arise for our determination in this appeal as to whether the CENVAT Credit on: - i. escort / security personnel de....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the ownership and risk remain with the seller till delivery. Thus, outward services connected with delivery obligations cannot be excluded automatically without examining whether the clearance is completed at the factory gate or at the destination point under the contract. 8.3 This legal position has also been acknowledged by the Central Board. CBIC, vide Circular No. 1065/4/2018CX dated 08.06.2018 (F. No. 116/23/2018-CX-3), issued after the judgments in Roofit Industries and EMCO Ltd., clarified that the determination of "place of removal" must be made with reference to the point of sale, transfer of title, and contractual intention, and that outward services cannot be denied merely on the assumption that factory gate is always the place of removal. In the present case, escort/security services are directly linked with safeguarding consignments during outward movement and may qualify as input services if the place of removal extends beyond the factory gate. However, since the relevant purchase orders, delivery terms, insurance/risk clauses and contractual documents have not been placed before us in sufficient detail, we are unable to conclusively determine admissibility. Accor....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (64) GSTL 257 (SC) has categorically held that transportation of employees through rent-a-cab/employee transport services has no nexus with manufacture and is barred by the exclusion clause post-amendment. The Chennai Bench in Verizon Data Services India Pvt. Ltd. v. CST, Chennai, Final Order Nos. 40299-40309/2022 dated 24.08.2022 (para 7.2.1) has also reiterated that employee welfare services such as rent-a-cab and similar benefits are not eligible for credit after 01.04.2011. Therefore, credit on transport coordination services relating to employee movement is inadmissible for the period from 01.04.2011 onwards, and the disallowance is upheld for the post-amendment period. Agents Engaged to Collect C-Forms / Payments 10.1 The third issue relates to the admissibility of CENVAT credit on service tax paid to agencies engaged for collection of C-Forms and follow-up for realization of payments from customers. We find that such services are clearly post-sale and post-removal commercial activities undertaken after clearance of the goods. Collection of statutory declaration forms under the CST regime and recovery of sale proceeds arise only after the transaction of sale is complet....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(51) STR 55 (Tri.-Hyd.) recognized that green belt maintenance, being linked to statutory obligations of a manufacturing unit, cannot be treated as mere beautification or employee consumption. However, since the present record does not contain sufficient documentary proof such as Pollution Control Board directions, environmental clearances or work orders establishing statutory nexus, we consider it appropriate to remand this limited issue for verification. Credit on gardening shall be allowed only if the adjudicating authority finds that it was mandated for statutory green belt/environmental compliance. 11.3 With regard to Sodexo meal passes, medical services and canteen, the position is materially different. Post 01.04.2011, these services are expressly excluded under Rule 2(l) being primarily for personal use or consumption of employees. The Chennai Tribunal in Verizon Data Services India Pvt. Ltd. v. CST, Chennai, Final Order Nos. 40299-40309/2022 dated 24.08.2022 (para 7.2.1) has specifically held that Sodexo passes, health services and similar employee-oriented benefits are not eligible after 01.04.2011 treating them as employee consumption services. Even for the pre-01.04.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... us, a final determination cannot be rendered at this stage. Accordingly, this issue is remanded to the adjudicating authority for the limited purpose of verifying whether the impugned activities constitute admissible repairs/renovation/ modernisation or inadmissible construction/works contract services hit by the exclusion clause post-01.04.2011, and thereafter to decide admissibility strictly in accordance with Rule 2(l). Interest, Penalty and Invocation of Extended Period 13.1 Since substantial issues relating to escort/security services, gardening and works contract/civil services are being remanded for limited verification, the determination of interest and penalty cannot be finalized at this stage and shall necessarily depend upon the outcome of fresh adjudication on remand. 13.2 However, insofar as the question of limitation and invocation of the extended period is concerned, we find that the Department has rightly invoked the proviso to Section 11A of the Central Excise Act, 1944. The period of dispute in the present case extends from April 2010 to March 2015, covering both the pre-amendment and post-amendment regime of Rule 2(l). With effect from 01.04.2011, the d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er, in view of the sustained invocation of the extended period and continued availment of excluded credits post-01.04.2011, the adjudicating authority shall examine applicability of penalty provisions under Rule 15 of the CENVAT Credit Rules, 2004 in accordance with law. 14. In view of our detailed findings recorded hereinabove, we conclude that the admissibility of CENVAT credit in the present appeal depends upon the nature of the disputed services, the statutory amendment to Rule 2(l) of the CENVAT Credit Rules, 2004 w.e.f. 01.04.2011, and the factual nexus required to be established through supporting documents. Accordingly, the issue relating to escort/security services deputed along with goods during transit (Q1) is remanded to the adjudicating authority for limited verification of contractual terms, purchase orders, delivery obligations and determination of the correct "place of removal" in the light of the law laid down by the Hon'ble Supreme Court in Roofit Industries Ltd. v. CCE, 2015 (319) ELT 221 (SC) and CBEC Circular No. 988/12/2014-CX dated 20.10.2014. Likewise, gardening/green belt maintenance services (part of Q4) are remanded only for the limited purpose of veri....