2014 (2) TMI 42 - AT - Service Tax

Eligibility for cenvat credit - Outdoor catering services and tent services Held that - Following Commissioner of Central Excise, Bangalore-III, Commissionerate Versus Stanzen Toyotetsu India (P.) Ltd. 2011 (4) TMI 201 - KARNATAKA HIGH COURT - any service used by the manufacturer whether directly or indirectly in or in relation to the manufacture of final products constitutes input service merely because the services are not expressly mentioned in the definition of input service it cannot be said that they do not constitute input service and the assessee is not entitled to the benefit of CENVAT credit Decided in favour of Assessee.

Summary

Issues:
- Eligibility for cenvat credit of service tax paid for outdoor catering and tent services.

Analysis:
The judgment revolves around the eligibility of the appellant for cenvat credit of service tax paid for outdoor catering services and tent services. The outdoor catering services were utilized for setting up a canteen within the factory premises to comply with the Factories Act requirement of providing canteen facilities to workers exceeding 250 in number. Additionally, tent services were availed to erect temporary sheds in the storage area for safeguarding raw materials from rain during monsoons. The dispute arose when the department contended that the appellant was not entitled to cenvat credit for these services, leading to proceedings resulting in a demand for cenvat credit, interest, and penalties imposed by the Asstt. Commissioner, which were upheld by the Commissioner (Appeals).

Both parties acknowledged that a similar issue was addressed in the appellant's case for a subsequent period, where the Tribunal allowed cenvat credit for such services. The Tribunal based its decision on judgments from the Hon'ble Karnataka High Court, Hon'ble Bombay High Court, and Gujarat High Court, which supported granting cenvat credit for similar services. Consequently, the presiding judge, Rakesh Kumar, concluded that the impugned order was unsustainable and set it aside, thereby allowing the appeal.

In essence, the judgment highlights the importance of consistency in interpreting legal provisions and the significance of precedent in determining the eligibility for cenvat credit of service tax paid for specific services. The decision underscores the need for aligning judicial decisions with established legal principles and previous rulings to ensure fairness and uniformity in tax-related matters.