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Facts:
The
Appellant has a residential colony and club room attached to its
manufacturing unit. CENVAT Credit is availed on service tax paid on
security service provided at the colony, repairs of mixer used in the
canteen, civil work done at the colony, furniture/wooden partition for
VIP rooms and telephone lines installed at the residence of officer/club
rooms.
Held:
Relying on the decision in the case of
Manikgarh Cement [2010-TIOL-720-HC-MUM] and para 34 of the decision in
the case of Ultra Tech Cement Ltd. – 2010-TIOL-745- HC-MUM-ST, the
Tribunal held that services which are integrally connected with the
manufacture of final product are eligible input services. Residential
colony and club are welfare activities for the staff and have no nexus
with the business of manufacturing the final product and therefore are
not allowable. However, considering the disputes on the issue and the
different interpretations, penalty u/s. 11AC of the Central Excise Act,
1944 read with Rule 15(2) of CENVAT Credit Rules,2004 was set aside.
