CENVAT credit — Landscaping of factory garden — Held, it is social responsibility and statutory obligation of employer to maintain eco-friendly environment — Activities related to business and falls within the concept of ‘modernisation, renovation, repair, etc. of premises’ — Service tax paid on such services form cost of final products — Definition of input service wide enough to cover — Credit allowable. Medical and personal accident policy, catering services — Held, activities relating to bu<

 The respondent a manufacturer of excisable goods claimed credit of service tax paid on various services availed like: medical and personal accident insurances, personal vehicle services, landscaping of factory garden, etc. Revenue denied the credit and the order was also upheld by the CCE — Appeals. The Tribunal held that the aforesaid services fall within the phrase ‘activities relating to business’ and therefore, the assessee was eligible to claim the credit. Against such order, the Revenue preferred appeal before the High Court.

Held:

Affirming the order of the Tribunal the Court held that in view of CAS-4, the above services are taken into consideration while fixing the costs of the final products and in such a case, the assessee would be entitled to the CENVAT credit of the tax paid on such services. The Court also observed that the definition of the input service is very broad. What is contained in the definition is illustrative in nature. Landscaping of factory garden falls within the concept of ‘modernisation, renovation, repair, etc. of premises’. It is social responsibility and statutory obligation of employer to maintain eco-friendly environment. Moreover, medical and personal accident premium, vehicle insurance, etc. form part of salaries of employees and are activities relating to business. Therefore, the Tribunal’s order was upheld allowing credit of such items.