2009 (6) TMI 1002 - AT - Service Tax

Summary

Issues involved: Entitlement to Cenvat credit on outdoor catering service u/s 46 of the Factories Act for supply of food to factory employees.

Summary:

Issue 1: Entitlement to Cenvat credit on outdoor catering service
The appeal considered whether the respondent is entitled to Cenvat credit on outdoor catering service used in the factory-canteen for supplying food to factory employees during August 2006 to March 2007. The Tribunal's Larger Bench decision in a previous case was cited, which established that outdoor catering services used for supplying food in the factory canteen fell within the ambit of 'input service' under Rule 2 of the Cenvat Credit Rules, 2004. It was held that Cenvat credit of the tax paid on such service was admissible to the manufacturer if certain conditions were met. The appellant did not dispute the liability to maintain a canteen under the Factories Act or that the expenses of supplying food in the canteen formed part of the cost of production of excisable goods during the disputed period. Consequently, the order granting the benefit of Cenvat credit to the assessee for the period in question was upheld, and the Revenue's appeal was dismissed.

Conclusion:
The Tribunal upheld the lower appellate authority's decision to grant Cenvat credit on outdoor catering services for the disputed period, based on the applicability of the Larger Bench decision and the fulfillment of relevant criteria.