IN THE CUSTOMS, EXCISE & SERVICE TAX

APPELLATE TRIBUNAL

West Block No. 2, R.K. Puram, New Delhi  110 066.

Principal Bench, New Delhi



COURT NO. III



Excise Appeal No. 51028 of 2014 (SM)



[Arising out of the Order-in-Appeal No. 586/SVS/GGN/2013 dated 29/10/2013 passed by The Commissioner of Central Excise (Appeals), Delhi  III, Gurgaon.]



For Approval and signature :

Honble Shri Manmohan Singh, Member (Technical)

1.	Whether Press Reporters may be allowed to see	:

	the Order for publication as per Rule 27 of the

	CESTAT (Procedure) Rules, 1982?



2.	Whether it would be released under Rule 27 of 		:

	the CESTAT (Procedure) Rules, 1982 for 

	publication in any authoritative report or not?



3.	Whether their Lordships wish to see the fair		:

	copy of the order?



4.	Whether order is to be circulated to the 			:

	Department Authorities?

CCE, Delhi  III                                                          Appellant



	Versus



M/s Maruti Suzuki India Limited                                Respondent

Appearance Shri R.K. Mishra, (DR)  for the appellant.

Shri Hemant Bajaj, Advocate - for the Respondent.

CORAM : Honble Shri Manmohan Singh, Member (Technical) DATE OF HEARING : 12/06/2014.

DATE OF PRONOUNCEMENT : 22/12/2014 Final Order No.54822/2014 Per. Manmohan Singh :-

Revenue has come in appeal against order of the Commissioner (Appeals) No. 586/SVS/GGN/2013 in the case of Maruti Suzuki Commissioner (Appeals) has allowed Cenvat credit on house keeping services, rent a cab and business auxiliary service. Department feeling aggrieved by the order-in-appeal have come in appeal before the Tribunal.

2. Learned DR pointed out that there is no nexus between services received and item manufactured. Revenue relied upon Supreme Courts judgment in the case of M/s Maruti Suzuki (Citation) where nexus between input and output was considered necessary Appellant also relied upon CESTATs Judgement in Alora Times Ltd. vs. CCE, Rajkot (citation) wherein on the question of nexus, the input services credit was not allowed. DR also referred to the Mumbai High Courts judgement in the case of Manikgarh Cement reported in 2010 (20) S.T.R. 456 (Bomb.) but learned DR fairly agreed that above judgment related to the residential colony, may not be relevant to the present appeal under consideration. Accordingly, request was made to modify the Commissioner (Appeals) order. Revenue is not in appeal relating to Cenvat credit on rent-a-cab but they are contesting availment of credit on house-keeping service and business auxiliary services. Thus consideration of appeal is restricted to these two issues only.

3. On the other hand, Counsel of the respondents Shri Hemant Bajaj pointed out the judgment quoted by the Revenue has already been distinguished by various High Courts and Honble Tribunals judgments. For availment of Cenvat credit on house keeping service, he specifically referred to NTF India Pvt. Ltd. vs. CCE  2013 (30) S.T.R. 575, Balkrishna Industries Ltd. vs. CCE  2010 (18) S.T.R. 600, Yutaka Auto Parts India Private Ltd. vs. CCE final order No. A/56641/2013-SM dated 04/06/2013, Delphi Automotive System P. Ltd. vs. CCE final order No. A/50992/ 013-SM dated 12/03/2014, CCE vs. Lupin Ltd.  2012 (285) E.L.T. 221, CCE vs. M/s Samtel Colour Ltd.  2013  TIOL  370  HC  ALL  CX, Coca Cola India Pvt. Ltd. vs. CCE  2009 (15) S.T.R. 657 (Bom.), CCE vs. Ultratech Cement  2010 (20) S.T.R. 577 (Bom.).

4. For Business Auxiliary Services he relied upon following judgements CCE, Bangalore  III vs. Stanzen Toyotetsu India (P) Ltd.  2011 (23) S.T.R. 444, Coca Cola India Pvt. Ltd. vs. CCE  2009 (15) S.T.R. 657 (Bom.), CCE vs. Ultratech Cement  2010 (20) S.T.R. 577 (Bom.), and Toyota Kirloskar Motor Pvt. Ltd. vs. CCE  2011 (24) S.T.R. 645.

5. He further stated that input service credit is available as per the Karnataka High Court judgment and the CCE, Chandigarh vs. Federal Mogul Goetze (India) Ltd. He referred to the judgment of Hindustan Coca Cola Beverages (P) Ltd. vs. CCE, Hyderabad, CCE vs. Ultratech Cement and CCE, Bangalore vs. Stanzen Toyotetsu India (P) Ltd.

6. Heard both sides. Also gone thought the facts on records.

7. Main issue for consideration is whether Cenvat Credit is available on housekeeping service and business auxiliary service. Commissioner (Appeals) has allowed the benefit on above services but revenue has contested this grant.

8. Department feeling aggrieved by Commissioner (Appeals)s Order came before the Tribunal relying upon the decision of the Honble Supreme Court of India Judgement in the case of Maruti Suzuki Ltd. Vs. Commissioner [2009 (240) E.L.T. 641 (S.C.)] wherein it was held that for entitlement to credit of service tax, the service should have nexus with the process of manufacture. It was also held that the service must have relevance to the process of manufacture of the final products. Department has also relied upon a decision of the Honble Bombay High Court in the case of Commissioner of Central Excise, Nagpur Vs. Manikgarh Cement reported in [2010 (20) STR 456 (Born.) and in the case of Vikram Ispat Vs. CCE Auranganad [2009-TIOL-997-CESTAT-Mumbai]. Revenue also referred to South Zonal Bench, Bangalore in the case of M/s Telco Construction Equipment Co. Ltd., Vs. Commissioner of Central Excise & Customs Belgaum.

9. House Keeping Service - Basically cleaning service is under taken by the Respondent. It has been contended that if cleanliness was not maintained properly in the factory, it could adversely effect working environment and can affect manufacturing activity. I agree with the finding of Commissioner (Appeals). Cleanliness has to be maintained by all factories/manufacturing units as also provided under the Prevention and Control of Pollution Act for industries. Cleaning services are taken by the noticee as a pollution control measure and to ensure a healthy surrounding to all its employees. Further in the case of M/s Ultra Tech Cement, in 2009 (16) S.T.R. 363 (Com. Appl.), decision of the Apex Court in the case of Indian Farmers Fertilizer Co-operative Ltd. Vs. CCE [1996 (86) E.L.T. 177 (S.C.) has been referred. The Apex Court in the above case held that the pollution control equipment/devices were treatable as part and parcel of manufacturing activity. In the case before the Apex Court, the items involved are equipments and devices which were used to control the pollution and accordingly the Apex Court held that the same are to be treated as part and parcel of the manufacturing activity. Following the above ratio that in the place of equipment/devices, in the instant case, services such cleaning/maintenance of garden/trees, plantation etc. are used to control the pollution created by the industry and the same could be considered as input services used in relation to manufacture of final product. In view of above, there is no force in the contention of the Revenue that Cenvat credit should be disallowed. In view of Supreme Courts judgement and other several judgements relating to law at relevant time i.e. before amendment in 2011, Cenvat credit was allowable.

10. Business Auxiliary Service  It is seen that Revenue made a submission that nomenclature viz. Business auxiliary service (BAS) (Network cable lying/dismantling, installation of network cable, network lying) has been wrongly used by the respondent. It is Revenue contention that Network cable lying/dismantling, installation of network cable. Network laying fall in the Business auxiliary service was not correct. It was further pleaded that provision of these services has no nexus with the manufacturing /clearance process of final products. Rule 9(5) of the Cenvat Credit Rules, 2004 places the burden of proof regarding admissibility of Cenvat credit on the manufacturer taking such credit. In the present case, the Assessee has failed to show how the provision of these services has any nexus with the manufacturing/clearance process of their final products. I find force in revenue contention. It is rightly pointed out that laying of cables or network cables were not in the nature of business auxiliary service. Cenvat credit on these cables could be allowed only if these are covered under eligible inputs or capitals as provided under he rules. I accept revenues submissions on this account.

11. In view of above, appeal is partly allowed and Commissioner (Appeals)s order is partially modified.

(Pronounced in the open court ON 22.12.2014.) (Manmohan Singh) Member (Technical) K. Gupta 6