Case Law Details
Andhra Organics Ltd Vs CCT (CESTAT Hyderabad)
The issue to be decided is whether the appellant is entitled to credit of the service tax paid on the tour operator service used for transporting their employees from their residence to the factory.
Input services on which credit is allowed have to be used by manufacturer whether directly or indirectly in or in relation to the manufacture of final products and clearance of final products up to the place of removal as per Sec.2 (l) of the CENVAT Credit Rules, 2004.
The question is whether bringing the workers to the factory from homes can be termed as an input service is in relation to the manufacture of final products. Every activity undertaken by a business can have some remote relation to their business.
The question is where you draw the line to decide whether it is used in or in relation to the manufacture. In my opinion, the line can be drawn at the factory.
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