GHCL LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) A very short issue is involved. The appellant has been denied credit of service tax paid on the security services on the ground that the same relate to the residential colony of the appellant, which is in the proximity to their factory and such services were not utilized directly or indirectly in or in relation to the manufacturer of the final product.

(2.) I find that the issue stands decided in the appellant's own case by the earlier order of the Tribunal being Order No. A/815/WZB/AHD./2009, dated 22 -4 -2009. For better appreciation para 3.1 of the stay order is reproduced below:

(3.) THE appellants' contention as reflected in the reply to the show -cause notice that their factory situated at a remote place where no facilities were available for stay of their engineers and workmen, and it was, therefore, necessary to construct a residential colony for the employees for being available on the spot in order to maintain continuity in the process of cement manufacture, has not been disputed. Therefore, service provided is relatable to business and credit of service tax is admissible as the service in respect of repairs and maintenance, civil construction in relation to the residential colony are input services. My view find support from the Tribunal's order in the case of Indian Rayon & Industries Ltd. v. CCE, Bhavnagar, 2006 (4) STR 79 holding that credit is admissible on service tax paid on mobile phones provided to employees to carry out business transactions. Credit has been held to be admissible even though the telephones are not installed within the factory premises. The decisions of the Hon'ble Allahabad High Court in the case of ITAT v. B. Hill & Co. (P.) Ltd. : [1983] 142 ITR 185 and the Hon'ble Bombay High Court in the case of Greaves Cotton & Co. Ltd. v. C/7X2005], 279 ITR 42 also lend support to my view - Allahabad High Court has held that expenditure incurred on restoration of buildings and residential quarters or factory was available as revenue expenditure for the reason that repair and reconstruction enable the assessee -company to carry on its business, while the Bombay High Court held that expenditure incurred on maintenance of transit quarters used for accommodating employees visiting Bombay from outstation for business purpose was to be allowed in computing the income chargeable under the head "Profit and gain of business or profession" under the provisions of Section 37(1).