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June 2011

(2011) 22 STR 89 (Tri.-Mumbai) — L’oreal India Pvt. Ltd. v. CCE, Pune-I.

By Puloma Dalal
Jayesh Gogri
Chartered Accountants
Reading Time 2 mins
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Cenvat credit of Service tax paid on house-keeping of guest-house, factory, garden maintenance and jungle cutting admissible — Service tax paid on picnic service for employees not admissible.

Facts:
The appellants were denied credit on outdoor catering service availed in guest-house, garden maintenance; house-keeping at guest-house, house-keeping at factory, picnic and jungle cutting services availed by them. The credit was denied on the ground that those services had no nexus with the business of the appellants.

The appellants expressed that services of garden maintenance, outdoor catering and house-keeping were related to the manufacturing activity undertaken by the appellants. Jungle cutting services were also related to the business of the appellants as the service was availed to keep the final product bacteria free. Apart from this, picnic service was availed to boost the employees for efficient working.

Held: The appellants were entitled for credit availed on outdoor catering service and house-keeping service except for the portion of service recovered from persons staying in guest-house. However, the credit on house-keeping services of factory, garden maintenance and jungle cutting services was fully allowed to the appellants. However, credit was fully denied on picnic services availed as it had no nexus with the business activity of the appellant.

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