TaxTMI 
TaxTMI 
2026 (2) TMI 899
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....hat Appellant had availed CENVAT credit on construction of hostel, temple, guest house, maintenance of colony, cab operator services, etc., which are not defined as input services under the provisions of Rule 2(l) of CENVAT Credit Rules, 2004. Accordingly, a show cause notice (SCN) was issued on 22.07.2014. Thereafter Adjudication authority as per the impugned order dated 31.03.2015 confirmed the demand along with interest as proposed in the SCN excluding the period from April 2009 to June 2011, since certain proceedings were already initiated for the relevant period. Further, penalty was also imposed under Rule 15(2) of CENVAT Credit Rules, 2004 read with Section 11AC of the Central Excise Act, 1944. Aggrieved by said order, present appeal is filed. 4. When the appeal came up for hearing, the Learned Counsel for the Appellant draws our attention to the Chartered Accountant (CA) certificate dated 30.10.2014 wherein it is certified that expenses incurred on input services form part of the value of products sold by the Appellant on which excise duty has been discharged. In this regard, the Learned Counsel relied on the following decisions; i. CCE, Nagpur vs. Ultratech Cem....
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....ant submits that the temple was constructed as part of the amenities provided in the colony to the employees and their family. Learned Counsel submits that both the issues are settled as per the judgment in appellant's own case reported in 2010 (260) ELT 369 (Bom.). 8. As regards Maintenance of Residential Colony and Guest House for the period from July 2009 to August 2011, the learned counsel for the appellant submits that the colony also needs to be maintained in good condition to provide a comfortable stay for the employees and their families in the quarters. This upkeep is for the safety of the employees which helps in better functioning of the manufacturing and business activity. Maintenance of staff colony includes cleaning, routine cutting of grass and wild growth, maintenance of trees, park / garden, playing areas of the employee's children, medical facilities, etc. The Appellant maintains the guest house by providing a comfortable stay and food for the people visiting the premises of the Appellant in relation to the maintenance of plant and manufacture of final product. Learned counsel relied on following decisions; i. UltraTech Cement Ltd. vs. Commissioner....
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....asible 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 the ambit of Rule 2(1) of the Cenvat Rules, 2004." 11. Learned Counsel further submits that the issue was also considered by the Tribunal in the matter of M/s. Vedanta Aluminium Ltd Vs. CCE, Cus. & S.T, Bhubaneswar-I- {2024 (8) TMI 656 - CESTAT, KOLKATA}, wherein it is held that; "13. It may be emphasized that the decision rendered by the Mumbai High Court in the case of Manickgarh Cements, relied upon by the Ld.AR, had been subsequently considered by the....
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....as such activity is not intimately connected with the business of assessee. The High Court observed that it is merely a welfare activity and not covered by the expression 'activities relating to business'. In the said case, the need for such residential facility inside the factory was not stressed. The Ld. Consultant has submitted that the residential colony was constructed to ensure availability of workers at all times, in the mines as well as the factory. Thus, the said activity cannot be considered as a mere welfare activity. Further, the decision of Hon'ble High Court of Bombay in Manikgarh Cement (supra) was rendered relying upon the case of Maruti Suzuki Ltd. v. Commissioner of Central Excise - 2009 (240) E.L.T. 641 (S.C.). The said decision was rendered in a case of interpretation of 'inputs' and not 'input services'. Moreover, the decision rendered in Maruti Suzuki Ltd. (supra) was doubted and referred to a Larger Bench and differed as reported in 2010 (260) E.L.T. 321 (S.C.). The decision in the case of Maruti Suzuki Ltd. - 2009 (240) E.L.T. 641 (S.C.) being no longer good law, the judgment rendered in the case of Manikgarh Cement relying upon t....
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.... pointing out that there was a wrong availment of Rs. 90,05,769/- for the period April 2010 to November 2011. The audit covered the period November 2010 to November 2011, but the information was collected for the additional period from 01.04.2010 to November 2011 on which the objection of wrong credit was pointed out. The audit never raised the objection as regards the credits which were availed prior to 01.04.2010. The Superintendent, Range A, Gulbarga, afterwards called for the information for the credit availed prior to 01.04.2010 and now this figure of the credit availed from 2008-2009 to 31.3.2010 is included in the Show Cause Notice. The details of the credit availed are as under - 1) Credit availed from 2008-09 to 31.3.2010 as called by the Superintendent, Range A, Gulbarga Rs. 88,97,317/- 2) The credit availed during the period from 1.4.2010 to Nov/2011 as calculated by Audit Party for which objection was raised in the Audit Memo. Rs. 90,05,769/- 3) Credit availed after November/11 (July 2013 to April Rs. 2014) Rs. 3,956/- Total Rs.1,79,07,042/- 13. The Show Cause Notice is issued for a total amount of Rs.1,79,07....
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....t's own case where against Order No. A/631-634/15/SMB and CC, Visakhapatnam Vs. Mehta & Co-2011 (264) ELT 481 (SC) and the judgment of Hon'ble High Court of Bombay in the matter of CC Vs. M/s Manikgarh Cements - 2010 (10)-TMI-10-Bombay High Court or 2010 (20) STR 456 (Bombay); where the issue was considered and it is held that; "9. Applying the ratio laid down by the Hon'ble Apex Court in the case of Maruti Suzuki Limited Vs. Commissioner of Central Excise, Delhi (Supra), we hold that unless the nexus is established between the services rendered and the business carried on by the assessee, the benefit of CENVAT credit is not allowable. In the present case, in our opinion, rendering taxable services at the residential colony established by the assessee for the benefit of the employees, is not an activity integrally connected with the business of the assessee and therefore, the Tribunal was not justified in holding that the services such as repairs, maintenance and civil construction rendered at the residential colony constitutes 'input service' so as to claim credit of service tax paid on such services under Rule 2(1) of the CENVAT Credit Rules, 2004." 15. In....