2016 (12) TMI 1581 - HC - Central Excise

CENVAT credit - catering services - denial on the ground that the same is not used in or in relation to the manufacture of the finished excisable goods in its factory - Held that - the issue stands decided in favor of assessee in the case of The Commissioner of Central Excise v. M/s. Borg Warner Morse Tec Murugappa Pvt Ltd 2015 (4) TMI 254 - MADRAS HIGH COURT where similar issue was raised - It is made clear that the cost of food borne by the worker should not be taken into consideration for the purpose of grant of credit of service tax - appeal allowed - decided in favor of assessee.

Summary

Issues:
Challenge to denial of credit of service tax paid on catering services for manufacturing excisable goods.

Analysis:
The assessee contested the order denying credit of service tax on catering services used in manufacturing finished excisable goods. The appeal raised substantial questions of law regarding the disagreement with previous tribunal judgments and the eligibility of outdoor catering services as input services. The court referred to previous decisions in favor of the assessee, establishing precedent in similar cases.

The court cited two previous judgments in favor of the assessee, highlighting the decisions in The Commissioner of Central Excise v. M/s. Borg Warner Morse Tec Murugappa Pvt Ltd and The Commissioner of Central Excise v. M/s. Visteon Powertrain Control Systems (P) Ltd. These judgments supported the assessee's claim and influenced the decision in this case.

The court ruled in favor of the assessee, answering the questions raised in the appeal against the revenue. The appeal was allowed, emphasizing that the cost of food borne by the worker should not be considered for granting credit of service tax. The judgment clarified the decision and closed the related motion.

In conclusion, the judgment favored the assessee, overturning the denial of credit for service tax paid on catering services used in manufacturing excisable goods. The court relied on previous decisions to support the assessee's claim and provided a clear ruling in their favor, emphasizing the exclusion of worker-borne food costs in granting service tax credit.