2017 (8) TMI 1352 - AT - Central Excise

CENVAT credit - canteen services under the head of Outdoor Catering Services - Held that - the onus of establishing the fact that the appellant are entitled to CENVAT credit is on them - Hon ble High Court of Bombay in the case of CCE, Nagpur Versus Ultratech Cement Ltd. 2010 (10) TMI 13 - BOMBAY HIGH COURT has clearly held that the appellant are not entitled to Outdoor Catering Services , unless they pay for it - appeal dismissed - decided against appellant.

Summary

Issues:
1. Appeal against order remanding the matter for fresh adjudication regarding availing CENVAT credit for canteen services under 'Outdoor Catering Services.'
2. Interpretation of definition of input services for availing CENVAT credit.
3. Allegation regarding collection of canteen charges from employees and its impact on admissibility of credit.
4. Application of legal precedents and decisions in determining eligibility for CENVAT credit.
5. Onus of establishing entitlement to CENVAT credit on the appellant.

Analysis:
1. The appeal was filed against the Commissioner (Appeals) order remanding the matter for fresh adjudication regarding availing CENVAT credit for canteen services under 'Outdoor Catering Services.' The appellant sought a fresh show-cause notice, arguing that the original notice did not specify that credit for Service Tax would only be allowed for services not charged to employees. The appellant relied on various decisions to support their claim.

2. The crux of the issue revolved around the interpretation of the definition of input services for claiming CENVAT credit. The appellant contended that the show-cause notice did not mention the collection of canteen charges from employees and solely focused on the inadmissibility of credit as the services were not considered input services. Legal precedents were cited to support the appellant's argument.

3. The appellant emphasized that the show-cause notice lacked any allegation regarding the collection of canteen charges from employees. The Hon'ble High Court of Bombay's decision in the case of Ultratech Cement Ltd. was referenced, highlighting the importance of the cost of input services forming part of the final product's value to be eligible for CENVAT credit. The appellant's reliance on previous decisions of the Single Member Bench of the Tribunal was noted.

4. The judgment delved into the legal precedents cited by the appellant, particularly referencing the decision of the Hon'ble High Court of Bombay in Ultratech Cement Ltd. The court clarified that entitlement to 'Outdoor Catering Services' credit is contingent upon payment for the service. The onus of proving eligibility for CENVAT credit, in line with the High Court's decision, rested on the appellant. The court dismissed the appeal, upholding the impugned order's decision.

5. The judgment concluded by emphasizing that the appellant needed to establish their entitlement to CENVAT credit based on the High Court's decision. The court reiterated that credit for 'Outdoor Catering Services' would only be allowable if paid for, as per the legal precedents discussed. The appeal was ultimately dismissed, affirming the impugned order's decision.