By Puloma Dalal, Jayesh Gogri, Mandar telang Chartered Accountants
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CENVAT Credit of service tax paid on input services in respect of outdoor catering services for providing canteen facilities to the workers; maintenance of lawns and gardens within the factory as per the requirement of Pollution Control Board; maintenance of cycle stand located in the factory premises; and maintenance of guest house located adjacent to the factory premises is available?
Facts:
The appellants, manufacturer of fertilisers and chemicals availed CENVAT Credit on the following services which was disallowed:
• Outdoor catering services availed for providing canteen facilities to the workers;
• Maintenance of lawns and gardens within the factory as per the requirement of Pollution Control Board;
• Maintenance of cycle stand located in the factory premises; and
• Maintenance of guest house located adjacent to the factory premises.
The Appellants pleaded that canteen services were provided to the workers in view of the requirement under the Factories Act. Similarly, maintenance of lawns and gardens was mandatory requirement under the Pollution Control Board subject to which the permission for running the factory has been granted, maintenance of cycle stand was necessary requirement for the factory workers and the guest house was used by the guests of the company and hence, service tax paid on all these services should be allowed as CENVAT Credit.
Held:
CENVAT Credit in respect of outdoor catering service was admissible in view of the Hon’ble Bombay High Court’s decision in case of CCE, Nagpur vs. Ultratech Cement Ltd. (supra) 2010 (20) S.T.R. 577 as the number of workers in the appellant’s factory was more than 250 and it was mandatory to provide canteen facilities to the factory workers. Maintenance of lawns and gardens was a condition imposed by the Rajasthan Pollution Control Board which was necessary under relevant Acts. Hence, service tax credit in respect of the same was held admissible. Maintenance of cycle stand was necessary requirement and hence, It was also a cenvatable service. Maintenance of guest house, adjacent to the factory premises, was a necessary business requirement as the factory was located outside the City boundaries. Thus, in view of various decisions, maintenance of residential premises was associated with business activities and CENVAT Credit availed by the appellants was held as eligible.
