2011 (6) TMI 216 - AT - Service Tax

Waiver of pre-deposit - Cenvat credit - catering services - allegation against the appellant in the show-cause notice is that the appellant is entitled to take input service credit on outdoor catering service as per the definition under Rule 2(l) of CENVAT Credit Rules, 2004 - in the case of CCE v. Ultratech Cement Ltd. 2010 -TMI - 78203 - BOMBAY HIGH COURT - it has been held that if the service availed by the assessee in the course of their business of manufacturing, the assessee is entitled to take input service credit - Appeal is allowed

Summary

Issues:
- Denial of input service credit on catering services under Rule 2(l) of CENVAT Credit Rules, 2004.

Analysis:
The appellant filed an appeal against the denial of input service credit on catering services, arguing that the services are covered under the definition of Rule 2(l) of CENVAT Credit Rules, 2004. The issue was considered narrow, referencing a previous decision by the Hon'ble High Court of Bombay in a similar case involving Ultratech Cement Ltd. The appellant sought to set aside the impugned order and have the appeal allowed based on this precedent.

The advocate for the appellant cited the Ultratech Cement Ltd. case, emphasizing that if services are availed in the course of the business of manufacturing, the assessee is entitled to take input service credit. On the other hand, the Departmental Representative (DR) argued that the benefit would only apply if the assessee had supplied food free of cost to employees in the case of outdoor catering services, suggesting that the amount recovered from employees should be disallowed.

After hearing both sides and reviewing the submissions and records, the Tribunal found that the issue of entitlement to input service credit on outdoor catering services had been settled by the Hon'ble High Court of Bombay in the Ultratech Cement Ltd. case. The Tribunal rejected the DR's argument to remand the matter to quantify the amount recovered from employees, stating that it was beyond the scope of the show-cause notice. Citing a previous Tribunal case, the Tribunal emphasized that the argument that the benefit of the High Court decision would only apply if food was supplied free of cost to workers was not tenable. As a result, the Tribunal allowed the appeal by setting aside the impugned order.