2011 (7) TMI 548 - AT - Service Tax

Cenvat credit disallowed - outdoor catering services - as per dept.contract is not very clear and the person who raised the bills can be different from the contractor - Held that - Unable to agree with the view taken by the Commissioner (Appeals) that Contract copy produced by the assessee is not sufficient for the purpose of showing that service was rendered by a contractor to the appellant in view of the clear terms of the contract and also in view of the fact that bills raised by the contractor were cited in the show cause notice. As regards certificate issued by the Chartered Accountant was not produced before the original adjudicating authority or appellate authority and therefore, as suggested by the DR, the matter is required to be remanded to original adjudicating authority so that departmental officers can conduct study and verification of the Chartered Accountant certificate, if they so desire. 5. In view of the above discussion, matter is remanded to the original adjudicating authority for fresh decisio

Summary

Issues Involved:
Whether the appellant is eligible for credit of service tax paid on outdoor catering services.

Analysis:

Issue 1: Eligibility for credit of service tax on outdoor catering services
The appeal addressed the eligibility of the appellant for credit of service tax paid on outdoor catering services. The Tribunal considered the disallowance of credit due to unclear contract terms and the lack of evidence showing the inclusion of catering costs in the production cost. The appellant presented a certificate from a Chartered Accountant certifying that catering expenses were part of employee cost and production cost. The appellant argued that all bills were raised by them, contrary to the Commissioner (Appeals)'s observation. The Departmental Representative cited a High Court case where it was held that the assessee must demonstrate that outdoor catering costs are part of production cost and borne by the assessee. The Tribunal noted that once credit is deemed admissible, the assessee must show it forms part of production cost and was incurred by them. The Tribunal acknowledged the High Court's decision and the need for the assessee to prove the inclusion of catering costs in production expenses.

Issue 2: Sufficiency of evidence and need for remand
The Tribunal disagreed with the Commissioner (Appeals)'s view that the contract copy was insufficient to demonstrate service by a contractor, considering the clear contract terms and bills raised by the contractor. However, the certificate from the Chartered Accountant was not presented before the adjudicating authorities, prompting the Tribunal to remand the matter for verification by the departmental officers. The Tribunal emphasized the importance of proper evidence and the need for a fresh decision by the original adjudicating authority after allowing the appellants to present their case.

In conclusion, the Tribunal remanded the matter to the original adjudicating authority for a fresh decision, highlighting the requirement for the appellant to provide sufficient evidence regarding the inclusion of outdoor catering costs in the production expenses. The case underscored the importance of clear documentation and proper verification in determining the eligibility for service tax credit on outdoor catering services.