2015 (10) TMI 2673 - AT - Central Excise

CENVAT credit - outdoor catering service - denial on account of nexus - Held that - reliance placed in the case of CCE Nagpur vs Ultratech Cements Ltd. 2010 (10) TMI 13 - BOMBAY HIGH COURT wherein it has been held that service tax paid by the employer on the outdoor catering service shall be eligible for cenvat credit - appeal dismissed - decided against Revenue.

Summary

Issues:
- Eligibility of cenvat credit on outdoor catering service for finished goods manufacturing.

Analysis:
The appeal before the Appellate Tribunal CESTAT, New Delhi involved a dispute regarding the eligibility of cenvat credit on outdoor catering services for the manufacturing of finished goods. The Revenue appealed against the order dated 22.10.2013, where the Commissioner (Appeals) had allowed the cenvat credit taken by the Respondent on the outdoor catering service. The Revenue contended that the outdoor catering service had no nexus with the finished goods manufactured by the appellant, making it ineligible for cenvat credit under Rule 2(l) of the Cenvat Credit Rules, 2004.

During the proceedings, the Ld. AR for the appellant emphasized that there was no evidence on record to prove that the canteen charges paid by the employer had not been recovered from the employee. On the other hand, the Ld. Advocate for the Respondent argued that the issue was settled based on the decision of a Larger Bench of the Tribunal in a previous case and a judgment of the Hon'ble Bombay High Court. These precedents established that service tax paid by the employer on outdoor catering services should be eligible for cenvat credit. The Advocate also presented evidence to demonstrate the non-collection of charges on catering services from the employee.

Ultimately, the Tribunal found that the eligibility of cenvat credit on the disputed service was no longer a matter of debate due to the precedents cited by the Respondent's Advocate. Consequently, the Tribunal upheld the impugned order passed by the Commissioner (Appeals) and dismissed the appeal filed by the Revenue.