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Manikgarh Cement Versus Commissioner of Central Excise, Nagpur

2017 (9) TMI 776 - CESTAT MUMBAI

CENVAT credit - whether various services like repair, maintenance services and construction services used in the residential colony of the employees is eligible for CENVAT credit? - Held that: - reliance placed in the case of Reliance Industries Ltd. Versus Commissioner of CE & ST (LTU), Mumbai [2015 (11) TMI 100 - CESTAT MUMBAI], where it was held that once the cost of service has been taken as expenses and included in the cost of final product, the credit is admissible - CENVAT credit in respe .....

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2. Shri J.C. Patel, learned Advocate appearing on behalf of the appellant submits that though in the appellant's own case as reported at 2010 20 STR 456 the Hon'ble High Court of Bombay denied CENVAT credit, however, the fact is that the expenses incurred in respect of such service was included in the value of the final product which was cleared on payment of duty had not been considered. This fact was considered in the case of Coco Cola India Pvt. Ltd., - 2009 (15) STR 657 (Bom). The Ho .....

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n the cost of the final product, and CENVAT credit is admissible. He further submits that the fact whether the cost of the services has taken as expenditure by the appellant, in the statement of Shri D.K. Dak, Dy General Manager (Finance) dated 19.04.2006, he stated that the services utilized in the residential colony the expenses incurred thereon are in the nature of business expenses and indirectly related to manufacture of goods. He also produced Chartered Accountant's certificate wherein .....

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s expenditure in the value of finished goods CENVAT credit should be allowed. As per Cenvat Credit Rules, 2004, cenvat can only be allowed when the services received and utilized in respect of manufacture of final product. In the case of Manikgarh Cement, the Hon'ble High Court of Bombay has taken a view that the services utilized in the residential colony are not related to the manufacturing activity hence it was denied. He places reliance on the decision of Indo Rama Synthetics (India) Ltd .....

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in the said judgement. This issue has been considered in the case of Coco Cola India Pvt. Ltd., by the Hon'ble High Court of Bombay and the credit was allowed. The Division Bench of this Tribunal had considered both the decisions of Manigarh Cement (supra) and Coco Cola India Pvt. Ltd., (supra) in the case of Reliance Industries Ltd, (supra) and came to a conclusion that if the cost of services has been taken as expenditure and absorbed in the cost of final product, the credit should be all .....

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