2011 (2) TMI 24 - AT - Service Tax

Outdoor catering service - whether outdoor catering service can be held to be an input service when Factories Act mandates providing of canteen facilities when the number of workers employed in the factory was more than 250 - orders of the authorities set aside and remand the matter to the original authority for fresh consideration

Summary

Issues:
Appeal against denial of cenvat credit on Outdoor Catering Services.

Analysis:
The appeal before the Appellate Tribunal CESTAT, CHENNAI was regarding the denial of cenvat credit on Outdoor Catering Services, leading to a demand of Rs. 40,490 along with interest. The Commissioner (A) based the decision on a previous Tribunal case. The appellant argued that the issue aligns with a decision of the Hon'ble High Court of Bombay in a different case. The Departmental Representative mentioned that the previous Tribunal case is under appeal before the Hon'ble High Court of Madras.

Upon reviewing the submissions and records, the Tribunal noted the High Court of Bombay's decision in a similar case where outdoor catering services were considered an input service under the Factories Act if canteen facilities were mandated for factories with over 250 workers. However, in the current case, the number of employees at the appellant's establishment was not clearly stated. The appellant claimed to employ over 300 workers, which was not raised earlier due to a different focus of dispute.

Consequently, the Tribunal set aside the lower authorities' orders and remanded the matter to the original authority for reconsideration. The reconsideration was to be done in light of the High Court of Bombay's decision and considering the lack of clarity on the number of employees at the appellant's establishment. The Tribunal emphasized granting a reasonable opportunity of hearing to the appellants during the fresh consideration. The appeal was allowed for remand purposes.