Chartered Accountant
Bookmark and Share
click here to subscribe our newsletter
 
 
Corporate News *  Missing seized records must be considered while testing ITC claim; duplicate GST demands ordered corrected: Delhi High Court. *  GST appeal can’t be rejected without addressing taxpayer’s grounds: Allahabad High Court. *  Surplus IGST credit can offset CGST, SGST shortfall: GSTAT. *  GST refund can’t be denied when cancelled airfares are returned with tax: GSTAT. *  3 Hearing notices issued within 2 minutes: Gujarat High Court flags portal flaw, seeks report. *  GSTR-9, GSTR-9C filing for FY 2025-26 enabled; pending GSTR-1 and GSTR-3B must be filed first. *  Dupattas are exempt fabrics, can’t be taxed as fibres at 4%: Madras High Court. *  Full transitional credit allowed on capital goods received after GST rollout: GSTAT denies Rs. 6.99 lakh export duty credit. *  GST return mismatch alone can’t justify fraud proceedings: GSTAT orders fresh adjudication under section 73. *  Supplier found non-existent later can’t alone justify input tax credit denial: GSTAT. *  GST interest stops once tax reaches government account, can’t run until return filing: GSTAT. *  Cancelled flat booking- GST refund can’t be denied without excluding COVID period from limitation: GSTAT. *  India notifies rules of origin for India–New Zealand FTA. *  Incomplete E-bike kits classifiable as complete vehicles, but not eligible for CKD duty concession: CESTAT. *  Same GST rate on main input and output can’t by itself bar inverted duty refund: GSTAT. *  Unjust enrichment doesn’t apply to customs refunds from assessments finalised before July 13, 2006: Gujarat High Court. *  CENVAT credit can’t be denied solely because plant And machinery are embedded in earth: Karnataka High Court. *  DFIA exports ineligible for RoDTEP benefits; customs directs repayment with applicable interest. *  Second E-Way bill alone doesn’t prove another supply: GSTAT. *  Bail denied in Rs. 1.19 crore fake GST refund case over risk of accused absconding again: Punjab and Haryana High Court. *  GST registration can be restored after revocation deadline if outstanding dues are paid: Gauhati High Court. *  Multiple GST proceedings over same suppliers: Calcutta High Court directs dept. to share findings for adjudication. *  E-Governance portal services not OIDAR, fixed deposit interest not taxable: CESTAT. *  Rs. 500 Stamp duty required on authority letters for CAs, CMA and GST practitioners in Pune GST division.  *  Rs. 1.10 crore GST refund must be paid in cash after business closure: Allahabad High Court. *  Godown rent attracts 18% GST even when used exclusively for exempt agricultural warehousing: AAR. *  GST portal launches "Multi-State Registration" facility: one master TRN for registration applications across multiple States/UTs. *  RoDTEP scheme extended till 31st December, 2026.  *  Mere disagreement with order can’t override Rs. 20 lakh appeal limit: GSTAT. *  Customs interest can’t be backdated before confiscation liability is determined; nearly 8 year period excluded: Delhi High Court.
Subject News *  GST summons: anticipatory bail maintainable without arrest order, but relief denied in evasion case: Allahabad High Court. *  GST Appeal can’t be decided without hearing taxpayer’s objections to fresh evidence: Allahabad High Court. *  GST ITC can’t be reversed merely because supplier grants discount without reducing tax liability: GSTAT. *  Mere quoting of GST provision is not a valid charge: GSTAT quashes ITC denial. *  Personal hearing mandatory before adverse GST order, even without taxpayer’s request: Rajasthan High Court. *  Parallel bail pleas without full disclosure amount to abuse of process Rs. 43.08 crore GST case sent for fresh hearing: Supreme Court. *  GST refund based on unchallenged advance ruling can’t be recovered using later circular: GSTAT. *  Payment of GST alone doesn’t end interest and penalty liability when tax and interest remain unpaid beyond 30 days of notice: GSTAT. *  GST demand over builders’ 80% procurement rule requires reasoned adjudication: GSTAT. *  Eligible ITC doesn’t automatically entitle taxpayers to compensation cess refund on domestic sales: GSTAT. *  GST confiscation order passed before reply deadline invalid: GSTAT. *  GST interest can’t be retained after tax refund on delayed export receipts: Punjab & Haryana High Court. *  GST appeal can’t be dismissed over pre-deposit shortfall without opportunity To respond: Bombay High Court. *  DGGI SCN can’t be challenged before reply and adjudication:Chhattisgarh High Court. *  GST input tax credit can’t be denied solely due to supplier’s retrospective registration cancellation: GSTAT. *  GST notice must explain fraud allegations; merely repeating section 74 Is not enough:  Himachal Pradesh High Court. *  Audit detection alone can’t justify GST fraud penalty; specific suppression must be proved: GSTAT. *  GST order uploaded only under ‘Additional Notices’ tab without separate intimation set aside: Calcutta High Court. *  Service Tax appeal can’t be rejected for missing pre-deposit proof when payment is already recorded: CESTAT. *  SGST dept. can’t hear appeal against CGST order: Calcutta High Court. *  Mere dispatch of tax order can’t prove service or make appeal time-barred: CESTAT. *  Dealer incentives can’t be taxed merely on ledger entries: CESTAT. *  DGFT orders quashed for failure to supply DRI letter relied upon in SCN: Bombay High Court. *  GST penalty u/s 122(1A) can’t apply to Pre-2021 transactions; unregistered beneficiaries also covered: Delhi High Court. *  Expired E-way bill caused by wrong PIN code can’t justify GST penalty without intent to evade tax: GSTAT. *  Used railway rails can’t be taxed as track material without proof they are fit for reuse: CESTAT. *  Earlier DGGI notice doesn’t bar separate GST demand on different issue: Delhi High Court. *  ITC dispute involves no question of law: GSTAT directs appeal to Vice-President. *  Earlier DGGI notice doesn’t bar separate GST demand On different issue: Delhi High Court. *  No E-way bill required for interstate goods movement in november 2017: GSTAT quashes detention and penalty.  

Comments

Print   |    |  Comment

PJ/CASE LAW/2015-16/2659

Whether service tax credit on hiring of trained persons to provide first-aid to workers admissible?

Case:-JAYPEE SIDHI CEMENT PLANZ VERSUS COMMISSIONER OF CENTRAL EXCISE, BHOPAL

Citation:- 2015 (37) S.T.R. 379 (Tri. - Del.)

Brief Facts:-The appellants are cement plant engaged in the manufacture of cement and clinker chargeable to central excise duty. In terms of the provisions of Section 45 of the Factories Act, 1948, the appellants have to maintain first-aid box which is to be kept in the charge of responsible person, who holds the certificate in first-aid recognized by the State Government and for this purpose, the appellant have availed the service of manpower supply agents for hiring of the trained persons for providing first-aid to the workers/employees requiring the same. Similarly, first-aid box and the trained persons for providing first-aid is required to be maintained by the appellant in their mines in terms of the provisions of Section 21 of the Mines Act, 1952. For deploying the persons qualified to provide first-aid, the appellant have received the services from the man power supply agent in respect of which they availed Cenvat credit of Rs. 3,80,279/- during the period from December, 2008 to November, 2009. The department being of the view that these services have no nexus with the manufacturing, issued show cause notice for recovery of the above Cenvat credit along with interest and also for imposition of penalty. The show cause notice was adjudicated by the Asstt. Commissioner vide Order-in-Original, dated 23-5-2012 by which the above-mentioned Cenvat credit demand was confirmed against the appellant and penalty of equal amount was imposed. On appeal being filed to the Commissioner (Appeals) by order-in-appeal, dated 20-2-2014 upheld the Asstt. Commissioner’s order observing that the service, in question, availed by the appellant has no nexus with the manufacture of their final product and compliance with other relevant Acts is for the factory and same does not make nexus with the manufacture of their final products as per the Central Excise Law. Against this order of the Commissioner (Appeals), this appeal has been filed along with stay application. Though today this matter is listed only for hearing of the stay application, since only a short issue is involved, the Bench was of the view that the matter can be heard for final disposal. Accordingly, the requirement of pre-deposit is waived and with the consent of both the sides, the matter is heard for final disposal.

Appellants Contention:-Shri Hemant Bajaj, Advocate, ld. Counsel for the appellant, pleaded that maintaining first-aid room equipped with first-aid kit along with the trained persons for providing first-aid treatment is the requirement of Section 45 of the Factories Act, 1948 and there is similar provision in respect of Mines in Section 21 of the Mines Act, 1952, that unless the appellant comply with the provisions of Factories Act and Mines Act, they would not be allowed to carry on the manufacturing activities and hence, the maintenance of first-aid box along with trained persons and the availment of services for this purpose is an activity which has to be treated as in or in relation to the manufacture of final products, that the Commissioner (Appeals)’s finding that the compliance with other relevant Acts is for the factory and the same is not relevant for the purpose of Central Excise Law, is not correct, that Hon’ble Gujarat High Court in the case of CCE, Ahmedabadv. Ferromatik Milacron India Ltd. - 2011 (21)S.T.R.8 (Gujarat)has held that when under the provisions of Section 46 of the Factories Act, it is mandatory for the employer to provide canteen services to the staff and thus, the provision of canteen services is a statutory requirement, it is incumbent on a manufacturer of goods, to provide the same if he desires to run his factory and in view of this, the service of outdoor catering for providing canteen facilities within the factory has to be treated as service in or in relation to manufacture of the final products, and that the ratio of this judgment is squarely applicable to the facts of this case and hence, the impugned order is not correct.
Respondents Contention:-Shri M.S. Negi, learned DR, defended the impugned order by reiterating the findings of the Commissioner (Appeals) and emphasized that the maintenance of first-aid box along with trained persons has no nexus with the manufacture of the final products.

Reasoning Of Judgement:-The tribunal have considered the submissions from both the sides and perused the records. Providing of first-aid facilities to the workers, whether in the factory or in mines is the requirement of the Factories Act, 1948 and also the Mines Act, 1952 and if a manufacturer wants to carry on manufacturing activities, he has to comply with the provisions of the Factories Act and the Mines Act. In view of this, the availment of service for maintenance of the first-aid facilities for the workers has to be treated as the service used in or in relation to the manufacture of final products. The tribunal find that the same view has been taken by the Hon’ble Gujarat High Court in the case of Ferromatik Milacron India Ltd. (supra). In this regard, Paras 5 and 6 of this judgment are reproduced below:-
“5. ‘Input Service’ is defined under Rule 2(l) of the Rules, which insofar as the same is relevant for the purpose of the present appeal, reads thus :
“(l) ‘input service’ means any service, -
(i)         xxxx
(ii)        used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products and clearance of final products upto the place of removal, and includes the services in relation to setting up, modernization, renovation or repairs of a factory, premises of provider of output service or an office relating to such factory or premises, advertisement or sales promotion, market research, storage upto the place of removal, procurement of inputs, activities relating to business, such as accounting, auditing, financing, recruitment and quality control, coaching and training, computer networking, credit rating, share registry, and security, inward transportation of inputs or capital goods and outward transportation upto the place of removal;”
6. As noted hereinabove, under the provisions of Section 46 of the Factories Act, it is mandatory for the employer to provide canteen services to the staff. Thus, provision of canteen services is a statutory requirement. Provision of canteen services being indispensable, it is incumbent on a manufacturer of goods, to provide the same if he desires to run his factory. In view of the definition of “input service” which means any service used by the manufacturer, whether directly or indirectly, in or in relation to the manufacture of final products, the input service does not have to used directly in the manufacture of final products, it may be a service which is only indirectly used in relation to the manufacture of final products. In the circumstances, canteen services which are indispensable in relation to manufacture of the final products would certainly fall within the ambit of “input service” as defined under the Rules.” In view of the above, the impugned order denying the Cenvat credit is not sustainable. The same is set aside. The appeal as well as stay application are allowed.
In view of the above decision, the credit was held to be admissible and the appeal was allowed.

Decision:-Appeal allowed.

Comment:- The essence of the case is that according to Rule 2(l) Input service include any services which are used by the manufacturer whether directly or indirectly in or in relation to the manufacture of final products. And in accordance with these provisions manpower supply service availed by the assessee for hiring trained persons to provide first-aid to workers/employees has to be treated as input service because it is mandatory to maintain first aid facilities in the factory as per the provisions of the Factories Act and without complying with the provisions of Factories Act and Mines Act, the manufacturing activities cannot be carried on by the assessee smoothly. Hence, the cenvat credit was allowed.

Prepared By:- Neelam Jain
 

Department News


Query

 
PRADEEP JAIN, F.C.A.

Head Office : -

Address :
"SUGYAN", H - 29, SHASTRI NAGAR, JODHPUR (RAJ.) - 342003

Phone No. :
0291 - 2439496, 0291 - 3258496

Mobile No. :
09314722236

Fax No. :0291 - 2439496


Branch Office : -

Address:
1008, 10th FLOOR, SUKH SAGAR COMPLEX,
NEAR FORTUNE LANDMARK HOTEL, USMANPURA,
ASHRAM ROAD, AHMEDABAD-380013

Phone No. :
079-32999496, 27560043

Mobile No. :
093777659496, 09377649496

E-mail :pradeep@capradeepjain.com