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Birla Corporation Ltd V/S Commissioner of Central Excise


Company & Directors' Information:- BIRLA CORPORATION LIMITED [Active] CIN = L01132WB1919PLC003334

    Appeal No. E/51381/2017-SM (Arising out of Order-in-Appeal No. BHO-EXCUS-001-APP-093-17-18 Dated: 17.5.2017 Passed by the Commissioner, Central Excise (Appeals), Raipur) and Final Order No. 58073/2017

    Decided On, 15 November 2017

    At, Customs Excise Service Tax Appellate Tribunal Principal Bench New Delhi

    By, THE HONORABLE JUSTICE: S.K. MOHANTY
    By, MEMBER

    For Petitioner: Kumar Vikram, Advocate And For Respondents: G.R. Singh, D.R.



Judgment Text


1. Heard both sides. Denial of Cenvat credit on cleaning service is the subject matter of present dispute.

2. I find that this Tribunal in the case of the appellant itself, vide Final Order No. 53289/2017 dated 11.5.2017 has extended the Cenvat benefit on cleaning service used/utilised by the appellant at the residential premises of their employees. The relevant paragraphs in the said order are extracted given below:

"4. On perusal of the impugned order, I note that the Commissioner (Appeals) found that the cleaning service availed for residential premises of the employee cannot be considered as an input service in terms of Rule 2(l) of Cenvat Credit Rules, 2004. He heavily rely on the decision of the Hon'ble Supreme Court in Maruti Suzuki Limited : 2009 (240) ELT 641 (SC) = . On perusal of the discussion in the impugned order, I find, that the findings of the Commissioner (Appeals) to the effect that the reasoning and ratio of Hon'ble Supreme Court decision with reference to "input" could be made equally applicable to "input service", is not legally tenable. The scope of application of the terms of "input" and "input service" are not identical. The Hon'ble Bombay High Court examined this aspect in detail in Ultratech Cement (supra). The High Court also noted the decision of the Supreme Court in Maruti Suzuki Limited. The High Court held that the expression "activities in relation to business" in the definition of input service postulates activities which are integrally connected with the business of the assessee. The Hon'ble A. P. High court in ITC Limited held as below:

"9. The Commissioner's order-in-appeal dated 27.05.2008 reflects that he accepted that the efficiency of the employees of an organisation would be dependent on various factors, one such being the provision of a housing colony. He further conceded that these facilities would contribute to the enhancement of the productivity of the organisation. Having stated so, the appellate authority surprisingly took the view that maintenance of the residential colony by the respondent company was only an obligatory activity owning to situational exigencies and was not connected either directly or indirectly to the manufacture of its final products. This inherent contradiction in the order-in-appeal was noted by the CESTAT, which opined that if accommodation was not provided by the respondent company to its employees at this remote location, it would not be feasible for it to carry on its manufacturing activity. The finding of the Commissioner that providing a colony to the employees was not directly or indirectly connected with the manufacturing activity of the respondent company was therefore not borne out on facts. The staff colony, provided by the respondent company, being directly and intrinsically linked to its manufacturing activity could not therefore be excluded from consideration. Consequently, the services which were crucial for maintaining the staff colony, such as lawn mowing, garbage cleaning, maintenance of swimming pool, collection of household garbage, harvest cutting, weeding etc. necessarily had to be considered as 'input services' falling within the ambit of Rule 2(l) of the Cenvat R

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ules, 2004". 5. As the issue involved in the present appeal is squarely covered by the above decision, the appeal is allowed by setting aside the impugned order." In view of the settled position of law, I do not find any merits in the impugned order. Accordingly, after setting aside the same, the appeal filed by the appellant is allowed.
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