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2015 (11) TMI 100 - AT - Service TaxDenial of CENVAT Credit - construction service, repairs and maintenance service, security service, manpower recruitment and supply service, works contract service etc - services utilized for residential colony/township of the appellant factories - Held that:- Appellant has various factories which are situated in remote areas. In order to run the factories smoothly, without any stoppages, they had constructed township/residential colonies near factory premises and accommodated the employees working in such factories. It is a fact, that appellant had produced Cost Accountant's certificate indicting that the expenses incurred for setting up of the township/colony and various expenses incurred for maintenance and upkeep of such factory was charged to balance sheet/profit and loss account as expenses and the said expenses were considered as cost of production was produced before the adjudicating authority, as well as the first appellate authority and both the lower authorities did not controvert the said certificate in any way nor both the lower authorities have directed for special audit of the records of the appellant as provided under Section 14AA of the Central Excise Act, 1944. Expenses which were incurred by the appellant for setting up of the township/colony for their employees is expenses which is in relation to the business activity of the appellant which is manufacturing final products i.e. petroleum products. It is also noted that while arriving at the price of the finished goods manufactured in these factory premises appellant had considered the expenses and included the same while arriving at the cost of production of the final products manufactured in those factory premises. It would mean that setting up of residential colony/township is in 'relation to the business activity of the appellant which is manufacturing of petroleum products and clearing the same on payment of excise duty. The Central Excise duty paid by the appellant on their finished goods is on advalorem which has been arrived at after considering all the expenses that had gone into manufacturing of the finished goods which included the cost of setting up of township and the residential colony. Intention of the legislature is to provide for credit in respect of the inputs, capital goods and input services which are used in or in relation for manufacture of the final products and that duty is paid only on the value addition which takes place. This intent of the legislature clearly comes out in a press note dated 12.8.2004 which was issued by the Ministry of Finance when the draft Cenvat Credit Rules, was circulated for inviting comments from trade and industry. If the cost of various services availed if it forms part of the assessable value of the goods manufactured and sold by the Appellant, there was no reason to deny cenvat credit of the duty/taxes paid on various inputs/inputs services availed, for undertaking the business operations. Issue seems to be now squarely covered by the judgement of the Hon'ble High Court of Bombay in the case of Coca Cola India Pvt Ltd. We find strong force in the contentions raised by the learned Counsel that the Hon'ble High Court in the case of Manikgarh Cement (2010 (10) TMI 10 - BOMBAY HIGH COURT ) had not decided the issue, as it was never raised before them i.e. cost of setting up of the township/colony and the maintenance cost thereof is included in the cost of production for arriving at assessable value of the final products. It is settled law that a decision is an authority only on the proposition that it decides and not what was not urged or considered therein or what can be said to be logically flowing from {see Mittal Engineering Works (P) Ltd. (1996 (11) TMI 66 - SUPREME COURT OF INDIA), Fiat India Pvt. Ltd. - [2012 (8) TMI 791 - SUPREME COURT] In view of this we hold that the ratio as laid down by the Hon'ble High Court of Bombay in the case of Coca Cola India Pvt. Ltd. (2009 (8) TMI 50 - BOMBAY HIGH COURT) is specifically on the point raised by the appellant before the lower authorities as well as before us. - Impugned order is liable to be set aside - Decided in favour of assessee.
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