In The Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench At Ahmedabad

****

Appeal No	        : E/10513/2013

(Arising out of OIA-PJ/394-395/VDR-I/2012-13 Dated 23/01/2013 passed by Commissioners of Central Excise, Customs and Service Tax-VADODARA-I)

M/s Indian Oil Corporation Ltd 			:	Appellant (s)

       Vs 

Commissioners of Central Excise,
Customs and Service Tax-VADODARA-I	:	Respondent (s)


Represented by: 
For Appellant (s)    : Shri Willingdon. C, Advocate
For Respondent (s) : Shri Govind Jha, Authorised Representative

For approval and signature:

Mr. H.K. Thakur, Honble 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?
No
2.
Whether it should be released under Rule 27 of the              
CESTAT (Procedure) Rules, 1982 for publication         in any authoritative report or not?

No
3.
Whether their Lordships wish to see the fair copy of                     the order?

Seen
4.
Whether order is to be circulated to the Departmental                 authorities?

Yes


CORAM:
MR. H.K. THAKUR, HONBLE MEMBER (TECHNICAL)


Date of Hearing/Decision: 30.06.2015


           


Order No. A/10922 / 2015 Dated 30.06.2015

Per: H.K. Thakur

This appeal has been field by the appellant against OIA No. PJ/394-395/VDR-I/2012-13 Dated 23.01.2013 under which two separate order-in-original passed by the Adjudicating Authority have been decided rejecting CENVAT credit of Service tax paid.

2. Shri Willindon C. (Advocate) appearing on behalf of the Appellant argued that issue involved in both the orders in original are different therefore, the issues may decided separately. It was his case that with respect to OIO No. 25/IOCL/D-IV/VORI/11-12 Dated 25.07.2011 the issue involved is admissibility of CENVAT credit of service tax paid on man power supply for Para medial staff to the appellant. Learned Advocate submitted that service tax credit taken with respect to the Para medical staff used in places other than factory has been reversed by the appellant alongwith interest. With respect to services of Para medical staff availed in the factory premises, it was argued that same is essentially requirement under the Factories Act, 1948. He relied upon Order No. A/10823/2015 Dated 12.06.2015 passed by this bench in the case of Gujarat State Fertilizers & Chemicals vs C.C.E & S.T.- Surat-II. It was also his case that in view of this case law service tax credit on the services of Para medical staff availed is admissible and that no penalty is imposable upon the appellant.

3. Shri Govind Jha, (AR) appearing on behalf of the Revenue defended the order passed by the first appellate authority.

4. Heard both sides and perused the case records. The issue involved in this appeal is whether CENVAT credit of services of Para medical staff availed by the appellant for providing medical facilities to its employees in the factory is admissible or not, when such services are required to be provided statutorily under the Factories Act, 1948. In this regard appellant has relied upon Order Dated 12.06.2015 passed by this bench, Where such credit has been held to be admissible. The reasoning given by this Bench on the admissibility of CENVAT credit on such services is as follows:-

3. Heard both sides and perused the case records. It is the case of Revenue that services of Male Nurses for the welfare of the employees has no nexus to the manufacturing activity, especially when such services are also provided in the residential staff colony. However, on a special enquiry from the Bench as to what evidence is available with the Revenue to indicate that such services only provided in the residential colony, Learned Authorised Representative only referred to the bald statements made in the show cause notice and the adjudication order. In the absence of any documentary evidence it cannot be said that such services of Male nurse are provided only in the residential colonies. On the contrary, as per the provisions contained under Section 45 of the Factories Act 1948 read with Gujarat Factories Rules 1963, it is obligatory on the part of a specific manufacturer to maintain first Aid Appliances and ambulance alongwith trained medical staff to take care of certain situations. Once the facility is required to be provided statutorily, it cannot be said that the same is not be in relation to manufacture. Similar views have been taken by the courts in relation to Pollution Control Activity where these services are required to be provided statutorily under the Pollution Control Act and the Factories Act. On this issue jurisdictional High Court while allowing credit with respect to Canteen Services in the case of CCE, Ahmedabad I vs Ferromatik Milacron India Ltd [2011(21)STR.8(vvj)] has taken a view that Cenvat Credit on Canteen Service is admissible. Para 6 of this case law is relevant and is reproduced below:

6. As noted hereinabove, under the provisions of Section 46 of the Factories Act, it is mandatory for the employer to provide canteen services to the staff. Thus, provision of canteen services is a statutory requirement. Provision of canteen services being indispensable, it is incumbent on a manufacturer of goods, to provide the same if he desires to run his factory. In view of the definition of input service which means any service used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products, the input service does not have to used directly in the manufacture of final products, it may be a service which is only indirectly used in relation to the manufacture of final products. In the circumstances, canteen services which are indispensable in relation to manufacture of the final products would certainly fall within the ambit of input service as defined under the Rules.

4. Similarly, in the case of CCE vs Millipore India Pvt Ltd -2012(26)STR.514, Karnataka High Court has held as follows in Para 7 with respect to Pollution Control Activities, which is reproduced below:

7. That apart, the definition of input services is too broad. It is an inclusive definition. What is contained in the definition is only illustrative in nature. Activities relating to business and any services rendered in connection there- with, would form part of the input services. The medical benefit extended to the employees, insurance policy to cover the risk of accidents to the vehicle as well as the person, certainly would be a part of the salary paid to the employees. Landscaping of factory or garden certainly would fall within the concept of modernization, renovation, repair, etc., of the office premises. At any rate, the credit rating of an industry is depended upon how the factory is maintained inside and outside the premises. The Environmental law expects the employer to keep the factory without contravening any of those laws. That apart, now the concept of corporate social responsibility is also relevant. It is to discharge a statutory obligation, when the employer spends money to maintain their factory premises in an eco-friendly, manner, certainly, the tax paid on such services would form part of the costs of the final products. In those circumstances, the Tribunal was right in holding that the service tax paid in all these cases would fall within the input services and the assessee is entitled to the benefit thereof. In that view of the matter, we do not see any infirmity in the order passed by the Tribunal. Accordingly, the substantial questions of law framed in this appeal are answered in favour of the assessee and against the revenue. The appeal is dismissed.

5. The ratio laid down by the above relied upon case laws support the view that Cenvat Credit with respect to medical facilities provided statutorily under the Factories Act 1948 will be admissible. In view of the above observations, appeal filed by the appellant is allowed.

5. The present appeal filed by the appellant is covered by the above case law relied upon by the appellant and accordingly appeal filed by the appellant is allowed.

(Operative portion of the order pronounced in Court) (H.K. Thakur) Member (Technical) govind 2