AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 1822
X X X X Extracts X X X X
X X X X Extracts X X X X
....the manufacturing of Motor Vehicle Parts falling under Central Excise Tariff Headings No. 73209090 & 87081090 of the First Schedule to the Central Excise Tariff Act, 1985. During the relevant period, the Appellant availed Cenvat Credit of excise duty paid on inputs and capital goods and service tax paid on input services. 2.1 Audit of the Appellant's unit was conducted and during the audit, it was observed that the Cenvat Credit availed by the Appellant in respect of various input services namely House Keeping (Gardening), Vehicles Servicing, Tour & Travel, Outward Courier, Interior Decoration, Construction, Surface Colouring/Coating, Fabrication and Insurance Services is ineligible as the said services do not have nexus with the manufacturing process and the manufacturing can be completed without the use of these services also. On these allegations, a show cause notice dated 30.10.2012 was issued proposing denial of Cenvat Credit, along with interest and penalty. 2.2 After following the due process, the learned Commissioner vide the impugned order has confirmed the demand as proposed in the show cause notice, along with interest and penalty. Details of various input services....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ly which has been used by the Appellant in relation to manufacture of final product. 4.2.1 House Keeping/Gardening Service - As regards the denial of the Cenvat Credit on House Keeping/Gardening service, the learned Counsel submits that garden is required to be maintained in the factory premises under the Pollution Control norms; Landscaping/garden creates a healthy environment which increases the efficiency of the employees; moreover, the credit rating of the factory also depends on the maintenance of the premises; therefore, gardening services are intrinsically connected with the manufacturing activity of the Appellant. She further submits that the gardening services are covered under the inclusive clause of the definition of input services under Rule 2(l) of Cenvat Credit Rules as these services fall under the ambit of modernization, renovation, repair etc of the premises. She also submits that this issue in no more res integra and has been considered by the various Courts. In this regard, she places reliance on the following decisions: * M/s. JSW Steel Ltd. v. Commissioner of Central Excise, Customs and Service Tax-Belgaum, 2021 (12) TMI 381-CESTAT Bangalore ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in the impugned order, the learned Commissioner has observed that these services have been put in the negative list w.e.f. 01.04.2011 and accordingly, Cenvat Credit on same is not admissible. To counter this finding, the learned Counsel submits that no credit is availed in respect of these services post 01.04.2011; therefore, there is no question of denying the credit to the Appellant on these services on this basis. She also places reliance on the Circular No. 943/04/2011-CX dated 29.04.2011 which provided clarification in respect of the amendments made in the definition of input service w.e.f. 01.04.2011; it was clarified that the amendment done in the definition of the input service shall apply w.e.f. 01.04.2011.; whereas in the present case, credit is not availed in respect of these services post 01.04.2011; in the present case, the entire credit was taken before 01.04.2011. She further submits that transportation services are used by the administrative and technical staff of the company; these services facilitate the movement of the employees within the factory, to the home and for travelling from one place to other for sales, meeting clients etc and help the employees to car....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng technical, manufacturing and administrative blocks for better functionality such as proper lighting, cross-ventilation etc. She also submits that interior decoration falls under the nature of modernization/renovation or repair of factory premises of the Appellant and has direct nexus with the manufacturing and clearance of the products and therefore, credit in respect of such service should not be denied as held in the following cases: * Reliance Industries Ltd. vs Commissioner of C.Ex. & S.T., LTU, Mumbai, 2016 (45) STR 383 (Tri.- Mumbai) * M/s Carrier Airconditioning and Refrigeration Ltd. v. Commissioner of Central Excise, Delhi - IV, 2016 (4) TMI - CESTAT Chandigarh She further submits that in impugned order, the learned Commissioner has relied on the Circular No. 120/01/2010-ST dated 19.01.2010 to deny the credit on the interior decoration services on the basis that these services are for the beautification of premises but do not have any nexus with manufacturing or provision of output service. To counter this finding, the learned Counsel submits that the said circular is not applicable on the interior decoration services as these services are not just ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rh) and further, the department's appeal against this judgement was also rejected; therefore, department's reliance on the said Larger Bench decision is not justified to deny the Cenvat Credit. 4.2.7 Surface Colouring/Coating and Fabrication Services - As regards the denial of the Cenvat Credit on Surface Colouring/Coating as well as Fabrication services, the learned Counsel submits that the services of surface colouring/coating and fabrication are procured for the repair and maintenance of huge machineries and other iron & steel structures. She also submits that the machinery requires periodical maintenance including surface colouring, coating and greasing, painting and fabrication and welding etc to ensure proper functioning of the machinery; therefore, these services have the direct nexus with the manufacturing activity. 4.2.8 Insurance Service - As regards the denial of the Cenvat Credit on Insurance service, the learned Counsel submits that insurance services are received to obtain Mediclaim Policies for the employees which is mandated by the Factory Act and Labour Laws; the Mediclaim Policies cover any medical risk of the employees of the Appellant who are the real asse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Act. She further submits that the show cause notice did not bring out any activity or evidence on record to show fraud or suppression on the part of the Appellant. Further, she also submits that the present proceedings arose out of the audit conducted by the department in the month of December 2011. She further submits that the Appellant was under the bona fide belief that it is entitled to the credit on the input services and had been regularly filing the returns wherein the amount of credit availed on the input services was disclosed, hence, the department was already aware of the fact of the availment of credit of service tax paid on input services. Therefore, the extended period of limitation cannot be invoked in the present case. In this regard, she places reliance on the following cases: * FMI Automotive Components Ltd. v. Commissioner of Central Excise, Delhi-III, 2025 (2) TMI 141 - CESTAT Chandigarh * Good Year India Ltd. and Shri R.K. Gupta, Manager v. Commissioner of Central Goods & Service Tax, Faridabad, 2024 (10) TMI 287 - CESTAT Chandigarh * GD Goenka Pvt Ltd v. Commissioner of Central and Service Tax, 2023-TIOL-782-CESTAT-DEL 4.4 As ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d be covered within the ambit of the inclusive part of the definition. 9. Now, we will consider each and every service to find out whether the same falls under the definition of 'input service' and the Appellant is entitled to Cenvat Credit of the same. 9.1 House Keeping/Gardening Service: In this regard, we find that the service of house-keeping/gardening was held as 'input service' in various cases relied upon by the Appellant (cited supra), wherein it has been held that under Rule 2(l) of the Cenvat Credit Rules, this service falls under the ambit of modernization, renovation, repair etc of the premises. Further, we also find that in the impugned order, the learned Commissioner has relied upon the decision of the Chennai Bench of the Tribunal in the case of CCE, Trichy v. Sri Rama Vilas Services Ltd. (supra) to deny the Cenvat Credit in absence of nexus of the said service with the manufacturing activity. We note that subsequently, Mumbai Bench of the Tribunal in the case of Thyssenkrupp Electrical Steel (I) P. Ltd. (supra) has distinguished the said decision of the Chennai Bench and has held that Cenvat Credit in respect of gardening service is admissible as maintenance o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 9.5 Interior Decoration Service: We find that this service is to be held an 'input service' as the same has the direct nexus with the manufacturing and clearance of the final products. Also, the same has also been held an 'input service' by the Courts in the cases relied upon by the Appellant (cited supra). 9.6 Construction Service: We find that the Cenvat Credit on construction services availed by the Appellant relates to construction of the shed of the factory which is used for manufacturing of excisable goods at the registered premises. The said service has a direct nexus with the manufacturing and clearance of the products. Further, we also find that in the present case, the entire construction activity was carried out prior to the amendment in the definition of input service which was effective from 01.04.2011 and as per the various decisions cited supra, the Appellant is entitled to Cenvat Credit on construction activity as the same is directly linked to the manufacturing of the products. Further, we find that the in impugned order, the learned Commissioner has relied on the decision of Larger Bench of the Tribunal in the case of Vandana Global (P) Ltd. v. CCE, 2010 (253....