TMI Blog2018 (9) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... the people affected by the supply of raw material from their locality say natural resources like mines and minerals etc. the hazardous emission that may result in production activities. Sustainability is dependent on CSR without which companies cannot operate smoothly for a long period as they are dependent on various stake holders to conduct business in an economically, socially and environmentally sustainable manner i.e. transparent and ethical - CSR which was a mandatory requirement for the public sector undertakings, has been made obligatory also for the private sector and unless the same is to be treated as input service in respect of activities relating to business, production and sustainability of the company itself would be at stake. CSR activity being held as input service that was maintained by the appellant through an agency(Trust), the other dispute relating to suppression etc. that would attract extended period is not required to be discussed in the appeal, nor the part acceptance of the duty liability by the appellant. Appeal allowed - decided in favor of appellant. - Appeal No. E/85322/2018 - Order No. A/87216 / 2018 - Dated:- 31-8-2018 - Hon ble Dr. Suve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e period of time, the expression involves complete care and concern for the society at large and the people of the locality in which business is located in particular for which the term activities relating to business is of wider ramification and corporate social responsibility is within its ambit that would cover rule 2(1) of the Cenvat Credit Rules for which he prays for purposive interpretation to be imported to the Rule governing cenvat credit. 5. In response, the ld. AR for the department submitted that there was no nexus of input services with the business activity of the appellant since CSR activities are welfare activities and not related to business/ production related activities. He further submitted that the service of imparting training have been provided by the trust M/s. Shree Kalamadevi Charitable Trust to the students of the weaker section of society and not by the appellant company itself and therefore there was no service provided by the Trust against which cenvat credit is claimed by the appellant. Further, the appellant bifurcated the service input in three parts namely i) Canteen service ii) Supervision of students iii) Consultation and overall development o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate social, environmental, ethical human rights and consumer consciousness into the business operation and core statute in close collaboration with their stake holders. The World Bank CST defines CSR as the continuing commitment by business to contribute to economic development while meeting the quality of life in the work place and their family as well as of the community and society at large. Similarly, United Nations IDO also defines it as a management concept whereby companies integrate social and environmental concerns in their business operations and interaction with stakeholders (not only with share holders). Therefore, CSR is generally understood as being the way through which the company achieves a balance of economic, environmental and social imperatives (triple bottom line approach), while at the same time it addresses the expectations of stake holders and shareholders. UNIDO further elaborates it by saying that in this sense it is important to draw a distinction between CSR, which can be a strategic business management, and charity, sponsorship or philanthropy. Even though the latter can also make a valuable contribution to poverty deduction, CSR will directly enhance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The refusal of such cenvat credit availed by the appellant by the department, was mainly on three scores. First, CSR is a charity which is unrelated to production. Second, no direct service was availed by the appellant from the said Kalama charitable Trust as it had made the expenditure itself and sought reimbursement from the appellant. Third, the same is not in conformity to the Rules meant for raising of invoice as contemplated under Rule 9(2) besides being outside the scope of input service defined under Rule 2(l) of the Cenvat Credit Rules 2004 for which the credit as referred above was inadmissible. 9. The stand of the department is reiteration of the order-in-original passed by the Jt. Commissioner of Central Excise, Thane I that was also affirmed by the Commissioner (Appeals) Thane on the ground that the reimbursement of expenses is nothing but financial assistance in the form of charity made to Kalama Charitable Trust. Reliance has been placed on the decision of the CESTAT Chennai bench in 2011 (268) ELT 86 (Tri-Chennai) in holding such finding by the first appellate authority and justification of invocation of extended period was made by the Commissioner (Appeals) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ussed above. The answer is in the affirmative since to win the confidence of the stake holders and shareholders including the people affected by the supply of raw material from their locality say natural resources like mines and minerals etc. the hazardous emission that may result in production activities. 11.1. It has been argued by the ld. AR that in the Rajya Sabha, the Minister of Corporate Affairs stated on 22.02.2013 that there is no provision for CSR before introduction of Companies Bill 2012 but as found from the handbook referred, there was existence of such provision (may not be in the form of statutory provision) regarding discharging of CSR activities by the companies as it says that new guidelines issued by the DPE in April 2013 would replace two existing separate guidelines on CSR and sustainable development issued in 2010 and 2011 respectively. Therefore sustainability is dependent on CSR without which companies cannot operate smoothly for a long period as they are dependent on various stake holders to conduct business in an economically, socially and environmentally sustainable manner i.e. transparent and ethical. Hence in my considered view, CSR which was a mand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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