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Central Excise - Case Laws
Showing 181 to 200 of 225 Records
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2013 (8) TMI 160
Removal of processed fabrics - Interest on unpaid duty - Held that:- appellant is required to pay the interest on the amount of the duty liability which has been confirmed on them. To that extent, appellant’s appeal for non-imposition of penalty is liable to be rejected and is rejected - Decided against assessee.
Penalty u/s 11AC - Held that:- Since the appellant has paid the amount of duty liability and is ready to pay the interest liability, therefore, appellant is liable for imposition of penalty under Section 11AC of the Central Excise Act, 1944, at the same time, he is liable to get the benefit of 25% of the amount of duty liability confirmed subject to the condition that he pays the amount of interest and the penalty within thirty days on receipt of this order - Following decision of COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD Versus AKASH FASHION PRINTS PVT. LTD. [2009 (1) TMI 113 - GUJARAT HIGH COURT] - Decided against assessee.
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2013 (8) TMI 158
Cenvat credit - Service Tax paid on rent a cab service - Commissioner granted credit - Held that:- If the credit is availed by the manufacturer, then the said service should have been utilized by the manufacturer directly or indirectly in or in relation to the manufacture of final products or used in relation to activities relating to business - merely because these services are not expressly mentioned in the definition of input service it cannot be said that they do not constitute input service and the assessee is not entitled to the benefit of CENVAT credit - Following decision of Commissioner of Central Excise, Bangalore-III, Commissionerate Versus Stanzen Toyotetsu India (P.) Ltd. [2011 (4) TMI 201 - KARNATAKA HIGH COURT] and Commissioner of Central Excise Versus M/s Federal Mogul Goetze (India) Ltd. [2011 (9) TMI 120 - PUNJAB AND HARYANA HIGH COURT] - Decided against Revenue.
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2013 (8) TMI 157
Rule 6(3) and Rule 6(2) of Cenvat Credit Rules, 2004 - Appellants are manufacturers of sugar and molasses. In the course of manufacture of sugar at the stage of crushing of sugar cane Bagasse arises and subsequently at the stage of cleaning of cane juice impurities in the form of mud called press mud arises – Since the separate account and inventory of inputs/input services used in manufacture of dutiable and exempts goods has not been maintained as per the provisions of Rule 6(2) of Cenvat Credit Rules, 2004 in respect of clearances of Press mud and bagasse and amount at the rate of 5% of their sale value would be chargeable in terms of Rule 6 (3) of Cenvat credit Rules, 2004 – Held that:- Relying upon the decision in the case of Indian Potash [2012 (12) TMI 347 - CESTAT, NEW DELHI]as in the case of Uttam Sugar Mills Ltd. Vs. CCE, Meerut I[ 2006 (2) TMI 546 - CESTAT, NEW DELHI] has held that Rule 6(3) of Cenvat Credit Rules is not applicable in the case of clearance of bagasse and press mud that same view has been taken by the Tribunal in the case of appellants own case reported in [2013 (4) TMI 180 - CESTAT NEW DELHI] – Appeal allowed – Decided in favor of Assessee.
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2013 (8) TMI 156
Interest chargeable under Section 11AB - Appellants had supplied finished goods to their customers under contract with price escalation clause - on finalization of price, the same was revised upwards from back date and on receipt of differential amount on account of price escalation, the appellant paid the Central excise duty chargeable on the same - Appellant did not pay the interest on this duty paid under supplementary invoices – Held that:- Relying upon the Apex Court judgment in the case of CCE Pune vs. S K F Bearings Ltd. reported in [2009 (7) TMI 6 - SUPREME COURT], it was held that interest is payable under section 11AB – Decided against the Assessee.
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2013 (8) TMI 155
Rule 3(7)(a) of the Cenvat credit Rules – Mistake in application of formula under Rule 3(7)(a) of the Cenvat Credit Rules – Held that:- This is not a case where the appellant have availed Cenvat credit of entire amount of duty paid by the 100% EOU in respect of DTA clearance without applying the conversion formula prescribed in Rule 3(7)(a) - The appellant in this case had calculated the admissible Cenvat credit by applying the prescribed formula but according to the department their method of calculation is incorrect - when in respect of another period, the Commissioner (Appeals) has held there was no suppression, Penalty can not be imposed - Decided in favor of Assessee.
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2013 (8) TMI 154
Cenvat Credit on Input Service - input service - credit of service tax paid on rent, security and maintenance - inward / outward transportation goods - nexus of input services with manufacture – Held that:- As per the Hon’ble High Court of Bombay in the case of Deepak Fertilizers and Petrochemicals Corporation Ltd.[ 2013 (4) TMI 44 - BOMBAY HIGH COURT], it is held that as a matter of first principle on a plain and literal construction of Rule 3(1) it is not justified in holding that the appellant would not be entitled to avail of CENVAT credit in respect of services utilized in relation to ammonia storage tanks on the ground that they were situated outside the factory of production - The definition of the expression 'input service' covers any services used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products - Whereas Rule 3(1) allows a manufacturer of final products to take credit of excise duty and service tax among others paid on any input or capital goods received in the factory of manufacture of the final product, insofar as any input service is concerned, the only stipulation is that it should be received by the manufacturer of the final product - The input services in the present case were used by the Appellant whether directly or indirectly, in or in relation to the manufacture of final products – Appellant manufactures dutiable final products and the storage and use of ammonia is an intrinsic part of that process – Decided against the Revenue.
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2013 (8) TMI 153
Extended period of limitation - The appellant having their unit in Industrial Area, U.P., SIDCO, Sikandrabad, Distt. Bulandshahar manufacture MS tanks and radiators for transformers. They are a unit of Accurate Transformers Ltd. (ATL), Ghaziabad which manufactures transformers. The MS tanks and radiators manufactured by the appellant are transferred by them to Ghaziabad Unit of the ATL for its use in the manufacture of transformers - During the period of dispute i.e. during period from 2002-2003 to 2005-2006, in respect of clearances of MS tanks and radiators to their own unit in Ghaziabad for use in the manufacture of transformers, the duty was being paid on the price which was much less than 110%/115% of the cost of production, which was the value on which the duty was required to be paid in terms of Rule 8 of the Central Excise Valuation Rules – Held that:- As per circular No. 818/15/05-CX dated 15/5/05 issued by CBEC under Rule 12 (3) of Central Excise Rules, 2002 prescribing two stage scrutiny of ER-1 and ER-3 returns - Regarding scrutiny of ER-1 returns, it is clear that the returns filed by an assessee are required to be subjected to detailed scrutiny in course of which the concerned officer can call for the documents from the assessee wherever necessary for scrutiny.
Therefore in this case, if the concerned Range officer/Assistant/Deputy Commissioner or concerned Additional Commissioner had checked the returns, the short payment would have been immediately detected as, as observed by the Commissioner in para 4.5 of the impugned order, even the registration certificate of the appellant mentioned them as a unit of Accurate Transformers Ltd., and in all the documents of the appellant, the transfer of goods from the appellant to Accurate Transformer Ltd. had been reflected as inter unit transfer. Neither there is any allegation nor evidence to prove that there was some collusion between the appellant and the Jurisdictional Central Excise officers - The assessee cannot be penalized by invoking extended period under proviso to Section 11 A (1) for demand of duty and penal provisions of Section 11AC for indolence on the part of the jurisdictional Central Excise officers – Decided in favor of Assessee.
Revenue Neutral Exercise - Held that:- As per the decision in the case of Jay Yuhshin Ltd. vs. CCE, New Delhi [2000 (7) TMI 105 - CEGAT, COURT NO. I, NEW DELHI], when Revenue neutral situation comes about in relation to the credit available to an assessee himself in respect of the duty paid by him and not by the way of availability of the credit to the buyer of the assessee’s manufactured goods, the assessee cannot be accused of having contravened the rules with intent to evade the payment of duty and extended period under proviso to Section 11A (1) would not be invokable - Entire duty paid by the appellant in respect of clearances of MS tanks and radiators to their transformer unit, was available to the transformer unit as Cenvat credit - Unit of the appellant in Bulandshahar Distt. and the transformer unit of M/s Accurate Transformers Ltd. at Ghaziabad are owned by the same person – Therefore, extended limitation period is not invokable and, as such, the entire duty demand is time barred – Decided in favor of Assessee.
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2013 (8) TMI 152
Assessable value in case of job-worker - Respondents acted as job-workers for M/s KODAC India Ltd, Chennai (‘KODAC’ for short), for manufacture of Unexposed Cinematography Colour Polyester Positive Films. The raw material was supplied by KODAC and KODAC also paid job-work charges to the respondent - KODAC furnished a cost construction certificate w.e.f 19-09-2000 showing an assessable value of Rs. 5.69 per linear meter of the film after deducting a loss of 0.27 per liner meter toward loss incurred by M/s KODAC and respondent was paying duty based on assessable value of Rs. 5.69 per meter – Revenue is of the view that excise duty should be paid on the cost of manufacture of the film by respondent and not based on the selling price of KODAC which involves a loss of Rs. 0.27 per linear meter – Held that:- Relying upon the decision of the Apex court in the case of Ujagar Prints Etc Vs. UOI [1989 (1) TMI 124 – SUPREME COURT OF INDIA], it is held that for determining the assessable value in the hands of job-worker only the value of the raw materials plus the value of the job work done plus the manufacturing profit and the manufacturing expenses but not any other subsequent profit or expenses. Just as traders profit cannot form part of the assessable value traders loss cannot result in reduction in assessable value of the goods in the hands of the job-worker - Further the Apex Court in the case of Fiat India Ltd [2012 (8) TMI 791 - SUPREME COURT] did not find it proper to give deduction from cost of manufacture incurred by the actual who incurs cost of material and does the manufacturing activity by himself. So allowing deduction towards loss of the person supplying raw material to determine assessable value in the hands of the person undertaking manufacturing activity is not warranted – Appeal allowed – Decided in favor of Revenue.
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2013 (8) TMI 151
Extended period of Limitation - clandestine removal of goods - textile articles - The contention of the appellant was that once the alleged clandestine removal of goods came to the notice of the Department, notice for recovery of duty ought to have been issued within one year from such knowledge – Held that:- Upon reading the relevant provisions contained in Section 11A of the Act, it becomes clear that in case of duty which has not been levied or paid, or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion, wilful misstatement, suppression of facts, etc., period of service of notice on the person chargeable with such duty would be five years instead of one year provided in normal circumstances. Nowhere does this provision refer to the period of service of notice after fraud, collusion, wilful misstatement or suppression, etc. comes to the knowledge of the Department. In simple terms, the Department could recover unpaid duty up to a period of five years anterior to the date of service of notice when the case falls under proviso to sub-section (1) and such omission is on account of fraud, collusion, wilful misstatement, etc - Decided against the Assessee.
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2013 (8) TMI 130
Interest on interest under excise Act - JAC granted the refund and the amount was granted by the JAC vide his order No. ANK-III/BCP/195 dated 27.02.08 without any interest under Section 11B and as per Board’s circular No.670/61/2002-C.EX dated 01.10.02. The appellant requested the JAC on 13.10.08, for grant of interest and the JAC vide his order No. ANK/BCP/271/REFUND/2008 dated 22.01.09 sanctioned the interest amounting to Rs.28,120/from the date of final order i.e. 12.02.08 to 05.10.08. The appellant was paid remaining amount of interest amounting to Rs.8,78,293/- - Aggrieved by such an order, the assessee preferred an appeal before the first appellate tribunal. The first appellate authority after following the due process of law, set aside the impugned order and directed the lower authorities to pay interest on belated payment of interest to the assessee – Held that:- The ratio of Larger Bench judgment in the case of Sun Pharmaceuticals Industries Ltd. [2005 (5) TMI 90 - CESTAT, NEW DELHI] - the legislature thought it fit not to provide for any interest on interest even in case of delay in payment of interest on refund amount. To read the liability to pay interest on interest in the provisions of law contained in Section 11BB of the Act, would virtually amount to legislate upon the Act and that is not the function of the Tribunal which is creation under the said Act itself and has to exercise power conferred upon it under the Act. It may also be added that before the introduction of Section 11BB, the Tribunal had no power to award interest by exercising inherent power, on the amount of refund of duty even if paid late. In this context, reference may be made to the judgment of the Hon’ble Allahabad High Court in the case of Prestige Engineering (India) Pvt. Ltd. v. Union of India [1990 (7) TMI 118 - HIGH COURT OF JUDICATURE AT ALLAHABAD)] ruled that When the Act (Central Excise) and the Rules made thereunder did not provide for payment of interest in case of refund of duty, It is to be presumed that the Parliament advisedly did not provide for the same, while enacting Section 11B in 1978. The authorities under the Act have to operate within the four corners of the Act and the Rules made thereunder. Since the Act or the Rules did not provide for grant of interest, the authorities under the Act, including the CEGAT, had no power to award interest - interest on delayed payment of interest, cannot be held to be permissible under the Central Excise Act and the Rules made thereunder – Decided in favor of Assessee.
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2013 (8) TMI 129
Rule 11 of the central Excise Rules read with Rule 25 of the Central Excise Rules,2002 - Two of the appellants, are second stage dealers as defined in rule 2 (s) of Cenvat Credit Rules, 2004 for selling of excisable products and issuing invoices showing excise duty payment on the goods as per provisions of Rule 11 (7) of Central Excise Rules, 2002 - Two second stage dealers had procured non-duty paid MS scrap from open market and supplied it under invoices which showed payment of duty on materials which were used by buyers(manufacturers) who were not interested in taking Cenvat credit – Held that:- Non-duty paid goods cleared to the manufacturers under invoice showing duty payment there is a clear violation of rules with intent to evade payment of excise duty on final products manufactured (by paying such duty through fraudulent credit) - This duty liability is not on the second stage dealer. But, still in my view, the situation will be covered by Rule 25 (d) and also in respect of non-duty paid goods supplied to the manufacturer under invoice showing duty payment. So, both the goods were liable to confiscation. This explains the slight contradiction between the orders of the two lower authorities. But this is not critical to the adverse consequence that visits the appellants due to his misdeeds. The reason that the goods were not available to confiscation should not be a reason to avoid penalty - Hon’ble High Court of Punjab and Haryana in the case V. K. Enterprises Vs. CCE [ 2011 (7) TMI 970 - CESTAT, DELHI] has held that penalties can be imposed in such cases under Rule 25 of the rules as it existed at that time. Since there is decision of a High Court in line with argument in present case, it is not considered necessary to follow any decision of the Tribunal to the contrary – Appeals filed by dealers rejected – Decided against the Assessee.
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2013 (8) TMI 128
Eligibility to take Cenvat Credit in respect of shortage quantity of input items - Shortages of inputs on inspection are not real shortages - Appellant use a large number of inputs about 60 to 80, for manufacture for their final products - Shortages in respect of 6 items mentioned above which had been detected in course of annual stock taking conducted by the appellant themselves - In respect of some other items, there was excess quantity also – Held that:- Shortage according to the appellant, in terms of percentage is about 2% and this fact is not refuted by the Department - In respect of solid inputs weightment is done by the weighing scale and in respect of furnace oil, the weightment is done by the dip-reading - Mistake are possible in determining the weight of inputs by weighing scale or by dip-reading. The fact that the mistakes are random mistakes, is also evident from the fact that in respect of a number of other items, there is excess also - Alleged shortages of inputs are not real shortages relying upon the decisions in the case of Triveni Glass Ltd. Vs. Commissioner of Central Excise, Allahabad reported in [2007 (8) TMI 194 - CESTAT, NEW DELHI] and other similar cases – Decided in favor of Assessee.
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2013 (8) TMI 127
Cenvat Credit on HR Coils – Lack of investigation and evidence - The invoices issued by the registered dealers M/s. Rishav Trading & M/s. Bansal Structurals mention that M/s. Pasondia Steel Profiles Ltd. had supplied the HR Coils to M/s. Rishav Trading and M/s. Bansal Structurals. Though statements of, Proprietor of M/s. Rishav Trading and Director of M/s. Bansal Structurals were recorded, there is nothing in these statements from which it can be inferred that they had not purchased HR Coils from M/s. Pasondia Steel. What they have admitted is the fictitious nature of their transactions with M/s. Pasondia Steel regarding CR Strip & CR Sheets. But their statements are totally silent about their transactions regarding purchase of HR Coils from M/s. Pasondia Steel. On this point neither any questions was put to them, nor have they made any statement. Thus, the statements of Proprioter/Director of the abovenamed company do not in any manner support the Department’s allegation with regard to HR Coils – Held that:- Invoice issued by the registered dealers mentioned the Truck Nos. in which the goods covered under the invoices had been transported. But absolutely no enquiry has been conducted with the truck owners. The entire case of the Department against the Respondent relies upon the evidence with regard to fictitious nature of the transactions of M/s. Pasondia Steel regarding the supply of CR Sheets by showing their bogus productions and bogus sale. But this evidence is of no relevance to the case where the claim of the respondent is they have purchased HR Coils from two dealers i.e. M/s. Rishav Trading & M/s. Bansal Structurals, who, in turn, claim that the HR Coils in question, had been purchased by them from M/s. Pasondia Steel - There is no evidence produced by the Department to show that M/s. Pasondia Steel had not sold any HR Coils to these two registered dealers – Decided against the Revenue.
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2013 (8) TMI 126
Cenvat Credit of insurance premium for insurance of company’s vehicles – Held that:- Since it is not disputed that the vehicles are also used by the officials for company’s work and since it is the Appellant company which benefits by arrival of its officials to the factory in time for which also the cars, in question, are used, providing of cars to the officers for company’s work as well as for commuting between the residence and the factory cannot be called welfare activity and is to be treated as activity related to business and the judgments of the Tribunal, in the cases of Commissioner of Central Excise, Raipur Vs. Topworth Steels Pvt. Ltd. reported in [2012 (9) TMI 235 - CESTAT, NEW DELHI], DSCL Sugar Vs. Commissioner of Central Excise, Lucknow reported in [2012 (12) TMI 221 - CESTAT, NEW DELHI], would be applicable – Decided in favor of Assessee.
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2013 (8) TMI 125
Limitation – Longer period for issuance of Show Cause Notice – cenvat credit - input services - outward transportation - Held that:- For invoking longer limitation period under proviso to Section 11A (1) of the Central Excise Act, the department has to prove that the wrong availment of Cenvat credit took place on account of fraud, wilful misdeclaration, misstatement or contravention of the provisions of the Central Excise Act, 1944 or of the rules made thereunder with intent to evade the payment of duty - Interpreting the provisions of proviso to Section 11A, the Apex Court in the case of Continental Foundation Jt. Venture vs. CCE, Chandigarh I [2007 (8) TMI 11 - SUPREME COURT OF INDIA] has held that when on account of conflicting judgments on an issue during some period, there was scope for entertaining doubt in respect of the view to be taken, the longer limitation period under proviso to Section 11A (1) would not be applicable - In this case allegation of intention to evade payment of Service tax has not even been made even in the show cause notice and only for this reason, the Jurisdictional Assistant Commissioner, after confirming the Cenvat credit demand, has not imposed penalty under Section 11AC, observing that he does not find default or the intention of the assessee to evade the duty, the proviso to Section 11A (1) would not be invokable – Extended period not invokable – Decided in favor of Assessee.
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2013 (8) TMI 123
Correction of mistakes in the order dated 8.8.2012 [2013 (8) TMI 122 - GUJARAT HIGH COURT] - Held that:- mistake is corrected and Rs.25 Lacs mentioned on the last line of first paragraph and on page 2 first line should be corrected to read as Rs.75 Lacs.
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2013 (8) TMI 122
Correction of mistakes in the order [2013 (8) TMI 121 - GUJARAT HIGH COURT] – Held that:- The amount of Rs.30 Lacs mentioned in paragraph 5 is corrected to read as Rs.1,13,42,000/- (Rupees One Crore Thirteen Lacs Forty Two Thousand Only) - Further, while granting time to the petitioner for the said pre-deposit, in place of word 'months', the word 'weeks' be corrected.
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2013 (8) TMI 121
Waiver of pre-deposit – Stay application -Issue involved is regarding demand of duty on the appellant on the ground of under valuation of finished goods 'Frit' and clandestine removal thereof. The demand is also on the ground that the appellant exceeded the SSI exemption limit of Rs.4 crores, subject to addition of confirmation of demand in respect of under-valuation and clandestine removal – Held that:-Adjudicating authority has relief upon only the consumption of gas used for fire and kiln - Statement of one of the appellant's manufacture, to whom the appellant had supplied the raw material “Frit”, was recorded and on the basis of such statement, the lower authority has come to the conclusion that there was gross clandestine removal of the goods - Issue is contentious one and needs to be gone into detail, which can be done as at the time of final disposal - The Petitioner is directed to deposit Rs.25 lakhs with the department within a period of 12 weeks – Decided in favor of Assessee.
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2013 (8) TMI 98
Welding electrodes used for repair and maintenance of plant and machinery, are eligible for Cenvat Credit or not – Held that:- Relying upon the judgment of Hon’ble Chhattisgarh High Court in case of Ambuja Cement Eastern Ltd. [2010 (4) TMI 429 - CHHAITISGARH HIGH COURT ], it has been held that welding electrodes used for repair and maintenance of plant and machinery eligible for Cenvat Credit - Hon’ble Karnataka High Court in case of Alfred Herbert (India) Ltd. reported in [2010 (4) TMI 424 - KARNATAKA HIGH COURT ] has also held that the goods used for repair & maintenance of plant and machinery are eligible for Cenvat Credit – Also, Apex Court in case of Grasim Industries Ltd. reported in [2011 (10) TMI 2 - SUPREME COURT OF INDIA] has held that repair & maintenance of machinery is not manufacture and therefore steal scrap, arising in course of the said activity is not excisable, this judgment does not help the Department, as for determining the eligibility for Cenvat Credit of an item used in an activity, what is relevant is as to whether without that activity in which the item, in question, is used, manufacturing operation are commercially feasible, and it is not relevant as to whether that activity by itself amounts manufacturer. In the case of Sree Rayalaseema Hi-Strength Hypo Ltd. reported in [2012 (11) TMI 255 - ANDHRA PRADESH HIGH COURT] decided by Hon’ble Andhra Pradesh High Court, the point as to whether without regular repair & maintenance of the plant and machinery by using welding electrodes, manufacturing operations, were commercially feasible, had not been considered – Decided in favor of Assessee.
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2013 (8) TMI 97
Cenvat Credit for input services - Outdoor catering service for providing canteen facilities to the employees, manpower supply service for gardening and land scaping for compliance with the directions of Pollution Control authorities, cleaning service for keeping the factory neat and clean and rent a cab service for provide transport facility to the employees for bringing them to the factory and dropping them back at their homes – Held that:- Outdoor catering has been availed for providing canteen facility to the workers which is necessary for compliance with the provisions of Section 46 of the Factories Act - Gardening and land scaping service, the same is required for maintaining green belt which is the requirement of pollution control laws - Service of cleaning, the same had been availed for keeping the factory neat and clean and dust free, which is also the statutory requirement of Section 7A and Section 11 to 16 of the Factories Act, 1956 - service of rent a cab availed for bringing the workers to the factory and dropping them home, this issue also stands decided in favour of the appellant by the judgments of Hon’ble Punjab & Haryana High Court and Karnataka High Court in the case of CCE, Chandigarh II vs. Federal Mogul Goetze (India) Ltd. reported in [2011 (9) TMI 120 - PUNJAB AND HARYANA HIGH COURT] - Availment of these services has to be treated as services availed in or in relation to manufacture of the finished product – Decided in favor of Assessee.
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