2011 (11) TMI 236 - AT - Service Tax

Whether benefit of CENVAT Credit of Service Tax paid on outdoor catering service is admissible Held that - The same has been decided in favor of assessee in previous orders and also in the case of CCE Mumbai Vs GTC Industries (2008 - TMI - 31592 - CESTAT Mumbai) therfore admissible. - Decided in favor of Assessee.

Summary

Issues:
1. Wrong availment of CENVAT Credit on expenses for outdoor catering services.
2. Disallowance of CENVAT Credit by Dy. Commissioner.
3. Appeal allowed by Appellate Tribunal.
4. Revenue's appeal against the decision.
5. Nature of outdoor catering services as input service.

Analysis:
The case involved the wrongful availment of CENVAT Credit amounting to Rs. 98,326 on expenses related to outdoor catering services during a specific period. The Dy. Commissioner, Central Excise & Customs, Div.III, Silvassa, disallowed the credit in the absence of documentary evidence linking the services to the manufacturing process. This decision led to the imposition of a penalty and interest on the appellants.

Upon appeal by the respondent, the impugned order was set aside, and the appeal was allowed, prompting the Revenue to file an appeal challenging this decision. The Revenue argued that outdoor catering services are not directly related to business or manufacturing activities but are rather considered welfare activities. Despite a previous decision by the Larger Bench of the Tribunal recognizing outdoor catering services in a canteen as an input service eligible for credit, the Revenue persisted with its appeal.

In considering the submissions, the Tribunal noted that in a prior case involving the same appellant, the benefit of CENVAT Credit for Service Tax paid on outdoor catering services was deemed admissible. Additionally, there was no stay against the Larger Bench decision supporting the credit eligibility for such services. Consequently, the Tribunal found no merit in the Revenue's appeal and rejected it, affirming the allowance of the CENVAT Credit for the outdoor catering services in question.