Case Law Details

Case Name : BASF India Ltd. Vs Commissioner of Central Excise, Mangalore (CESTAT Bangalore)
Appeal Number : Final Order No. 70 of 2012
Date of Judgement/Order : 03/02/2012
Related Assessment Year :
Courts : All CESTAT (716) CESTAT Bangalore (94)

CESTAT, BANGALORE BENCH

BASF India Ltd.

versus

Commissioner of Central Excise, Mangalore

FINAL ORDER NO. 70 of 2012

APPEAL NO. ST/560 of 2008

FEBRUARY 3, 2012

ORDER

P.G. Chacko, Judicial Member  

According to the agreement entered into by the appellant with M/s. Green Door, the latter is responsible for watering of lawns, bougainvilleas, creepers, shrubberies and shadow trees, keeping them neat by regular planting and replanting and trimming and pruning etc. inside of appellant’s factory premises. Credit taken by the appellant of the service tax paid on these services has been denied on the ground that the same is not covered by the definition of ‘input service’. Besides demand of service tax with interest, penalty equal to the service tax credit taken has also been imposed.

2. The learned counsel appearing for the appellant submitted that the issue is squarely covered by the decision of the Hon’ble High Court rendered in CCE v. Millipore India (P.) Ltd. [2011] 34 STT 86/16 taxmann.com 363 (Kar.). In this case while considering the appeal filed by the Commissioner of Central Excise against the decision of the Tribunal in the case of Millipore India Ltd v. CCE  [2009] 22 STT 536 (Bang. – Cestat), Hon’ble High Court after considering the definition of input service observed as follows.

“That apart, the definition of input services is too broad. It is an inclusive definition. What is contained in the definition is only illustrative in nature. Activities relating to business and any services rendered in connection there with, would form part of the input services. The medical benefits extended to the employees, insurance policy to cover the risk of accidents to the vehicle as well as the person, certainly would be a part of the salary paid to the employees. Landscaping of factory or garden certainly would fall within the concept of modernization, renovation, repair, etc. of the office premises. At any rate, the credit rating of an industry is depended upon how the factory is maintained inside and outside the premises. The Environmental law expects the employer to keep the factory without contravening any of those laws. That apart, now the concept of corporate social responsibility is also relevant. It is to discharge a statutory obligation, when the employer spends money to maintain their factory premises in an eco-friendly, manner, certainly, the tax paid on such services would form part of the costs of the final products. In those circumstances, the Tribunal was right in holding that the service tax paid in all these cases would fall within the input services and the assessee is entitled to the benefit thereof. In that view of the matter, we do not see any infirmity in the order passed by the Tribunal. Accordingly, the substantial questions of law framed in this appeal are answered in favour of the assessee and against the revenue. The appeal is dismissed.”

3. From the observations reproduced above, it is seen that the decision covers the issue before me and takes a view that credit of service tax paid for garden maintenance is admissible. Accordingly the appeal is allowed by setting aside the impugned order.

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Category : Service Tax (3370)
Type : Featured (4062) Judiciary (11695)
Tags : Cestat judgments (905)

3 responses to “Service tax paid on maintenance of garden eligible for input service credit”

  1. Prakash says:

    what is the % in GST for Horticulture services

  2. Sekar says:

    Very Informative….Thanks Sir…..

  3. deepak yadav says:

    THIS IS TO U INFORM U THAT I WANT KNOW TO INFORMATION ABOUT SERVICE TAX REGISTRATION

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