TMI Blog2012 (11) TMI 741X X X X Extracts X X X X X X X X Extracts X X X X ..... (10) TMI 10 - BOMBAY HIGH COURT] followed. - E/961 of 2011 - A/1585/WZB/AHD/2012 - Dated:- 23-10-2012 - B.S.V. Murthy, J. Appellant Rep by: Shri S J Vyas, Adv. Respondent Rep by: Dr Jeetesh Nagori, AR Per: B S V Murthy: During the course of audit of records of the appellant it was noticed that appellant had availed cenvat credit of service tax amounting to Rs. 5,73,371/- towards different services like Manpower Supply Services, Booking Services, Pest Control Services utilised in residential colony, Guest House and Sport Complex or services utilised for the persons who are not employees of the Company during the period July 2007 to June 2009. Proceedings were initiated taking a view that such credit is not admissible, which resulted in confirmation of demand for wrongly availed cenvat credit with interest and penalty equal to the amount demanded. 2. Heard both sides. 3. Learned advocate submits that in this case, the services like Manpower Supply Service, Booking service, Pest Control services were utilised in the appellant's staff colony, guest house and sport complex. He submits that the factory of the appellant is located in a remote place in An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at this Tribunal is not bound by the decision of the Hon'ble High Court in the case of Manikgarh Cement since a view was taken that activities undertaken by the Company were welfare activities and there is no clear finding of the facts otherwise. In the case of Gujarat Heavy Chemicals Limited - 2011 (22) STR 610 (Guj.) also, the issue before the Hon'ble Court was eligibility of service tax paid on the service utilised in residential colony. In that case also there was no submission by the assessee that the activities undertaken in the residential colony or providing residence to the employees was a necessity for the manufacturer and was not a welfare activity. In the absence of any such submission, it cannot be said that decision would be binding on the Tribunal. It is his submission that in view of these decisions, mainly in the case of HEG Limited, Manikgarh Cement and Gujarat Heavy Chemicals Limited, the conclusion that emerges is that the Tribunal is required to find the facts and decide whether the service is an input service under the facts and circumstance in each case and thereafter decide the eligibility. According to him, the two decisions in the case of Manikgarh Cement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequently but would have cost damage to the appellant. He submits that the decision of the Hon'ble High Court of Karnataka would clearly show that the decision as to whether a service is input service or not has to be based on the facts of the case and the circumstances of each case. He also relies upon several other decisions where Tribunal has taken a view that such credit of service tax paid on various services used in residential colony is admissible as cenvat credit. 3.5. As an alternative, he also submits that in view of the fact that there contrary three decisions during the relevant period as regards eligibility of credit of service tax paid on services utilised in the residential colony, extended period could not have been invoked in this case and no penalty could have been imposed. Therefore, as an alternate submission he would request that the demand may be limited to the normal period of limitation and penalty imposed may be set-aside. 4. Learned A.R. would submit that decision of the Hon'ble Supreme Court in the case of Maruti Suzuki ltd makes it very clear that there has to be nexus between manufacture and input service. Further, he submits that in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decisions of two High Courts which have been cited, do not consider that it is necessary to consider whether the service is a welfare activity. In fact, in Gujarat Heavy Chemicals Limited, a view was taken that provision of residential quarters by manufacturer was voluntary and therefore credit is not admissible. However, there is no decision as to what would be the position when it is not voluntary. In Manikgarh Cement case also the Hon'ble High Court of Bombay took the view that expenditure incurred on services received in residential colony was welfare activity. It has to be noted that there was no submission in both the cases on the part of the assessees that it was a necessity for manufacture. However, in my opinion, it cannot be said that High Courts were not aware of the fact that these two units are big units located away from the town and residential colony is generally by practice, created and maintained by Companies. Therefore, even though the decisions do not specifically say that it is a welfare activity or voluntary only, credit has to be denied. As regards the decision of the European Court, unless it is examined the decision vis-a-vis the definition of input service ..... X X X X Extracts X X X X X X X X Extracts X X X X
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