2011 (3) TMI 962 - AT - Service Tax

Cenvat credit - whether service tax paid on catering services used for providing food in the canteen to the employees in the factory premises is admissible or not - As per the Hon ble Gujarat High Court in the case of CCE,Nagpur Versus Ultratech Cement Ltd. 2010 -TMI - 78203 - BOMBAY HIGH COURT , held that it is admissible as credit - Thus, the demand for service tax, interest and penalty imposed cannot be sustained - Decided in favour of assessee.

Summary

Issues Involved: Whether the credit in respect of catering services provided by a third party to the employees of the appellants in their factory premises and the service tax paid thereon is admissible as credit to the appellants or not.

Analysis:

1. The issue in these appeals revolved around the admissibility of credit for catering services provided by a third party to the employees of the appellants in their factory premises, along with the service tax paid on those services. The appellant's advocate referenced previous decisions by the Hon'ble Gujarat High Court and the Hon'ble Mumbai High Court to support their argument. Specifically, they cited the case of CCE, Ahmedabad-I vs. Ferromatic Milacron India Limited - 2011(21) STR. 8 (Gujarat) and Ultratech Cement Limited 2010 (20) STR 577 (Bombay) to establish that the issue had already been settled by these higher courts. The advocate contended that the demand for service tax, interest, and penalty could not be sustained based on the precedents cited. Therefore, they requested a decision on the stay petitions and appeals due to the issue no longer being res-integra.

2. The presiding judge, Mr. B.S.V. Murthy, concurred with the appellant's advocate, noting that the issue of service tax paid on catering services for providing food in the canteen to employees in the factory premises had already been settled by the decisions of the Hon'ble Gujarat High Court and the Hon'ble Mumbai High Court. With the agreement of the learned DR, the judge deemed this a suitable case for a final decision at the current stage. Consequently, the stay petitions were allowed, and the appeals were also allowed with consequential relief granted to the appellants. The judge dictated and pronounced the decision in court, bringing the matter to a close.

This judgment highlights the importance of legal precedents set by higher courts in resolving complex issues related to the admissibility of credits and service tax payments, providing clarity and guidance for future cases in similar circumstances.