2014 (1) TMI 1100 - AT - Service Tax

Denial of Cenvat credit - Outdoor catering service provided to the workers, staff and other people of the factory Waiver of Pre-deposit - Held that - Prima facie, the applicant is liable to pay tax on employees contribution - the applicant is directed to deposit a further amount of Rupees three lakhs ten thousand as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.

Summary

Issues: Stay applications for waiver of pre-deposit of tax, CENVAT credit on outdoor catering service, conflicting decisions of Bombay High Court and Gujarat High Court.

The judgment by the Appellate Tribunal CESTAT Bangalore involved multiple stay applications for the waiver of pre-deposit of tax totaling Rs.27,06,492/- along with interest and penalty of Rs.2,73,280/- arising from a common order. The main issue revolved around the denial of CENVAT credit on outdoor catering service provided to workers, staff, and others at the factory. The appellant cited a favorable decision by the Hon'ble Bombay High Court in the case of CCE Vs. Ultratech Cement Ltd., while the respondent relied on a decision by the Hon'ble Gujarat High Court in the case of CCE Vs. Cadila Health Care Ltd., highlighting conflicting judicial precedents.

Upon hearing both sides, the Tribunal found prima facie that the applicant was liable to pay tax on employees' contribution for the outdoor catering service. Consequently, the Tribunal directed the applicant to deposit an additional amount of Rs. 3,10,000/- within four weeks, with a compliance report due by 5.6.2013. Following this deposit, the pre-deposit of the remaining tax, interest, and penalty would be waived, and the recovery thereof stayed during the pendency of the appeals. The decision was pronounced in open court, emphasizing the specific amount to be deposited and the timeline for compliance.

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