- (1.) Revenue has sought following substantial question of law as having arisen from the order passed by Customs, Excise & Service Tax Appellate Tribunal, New Delhi (for short the "Tribunal") on 20-10-2010 (Annexure P-4):- "Whether the CESTAT was correct in holding that the service of transportation of employees of a factory to the factory was an 'input service' under the ambit of definition of 'input service' as given under Rule 2(1) of the Cenvat Credit Rules, 2004 and consequently the credit of service tax paid on such service was allowed to be taken as credit under the said Rules of 2004." Respondent-company is engaged in manufacturing of I.C. Engine Parts and has been availing Cenvat credit on inputs/input service and capital goods under Cenvat Credit Rules, 2002. Respondent availed the Cenvat credit of Rs. 3,41,738 and Rs. 2,13,607/- on the strength of invoices issued by the tour operator i.e. bus ferrying the employees of the assessee.
(2.) As per the department, the services provided by the tour operator for ferrying employees was not covered under the definition of input service and therefore credit claimed is not admissible. The Adjudicating Authority confirmed the demand as stated above but the Commissioner (Appeals) vide the order dated 28-1-2009 set aside the order which has been affirmed by the Tribunal.
(3.) The Tribunal, inter alia, returned a finding that the transportation of the employees from their residence to the factory premises is related to their manufacturing activities, as without coming to factory, the production cannot be started. The provision of transportation facility to the employees increases efficiency and increases the production capacity of the manufacturing unit itself. The Tribunal has relied upon a judgment of Bombay High Court Coca Cola India Pvt. Ltd. v. Commissioner of Central Excise Pune-III, 2009 242 ELT 168;