2014 (3) TMI 142 - AT - Service Tax

Denial of cenvat credit - Outdoor Catering Service received in the factory canteen and used for supplying food to the workers/employees Waiver of Pre-deposit Held that - The food supplied to the workers/employees was subsidised to the extent of 50% - Following Commissioner vs. Ultratech Cement Ltd. 2010 (10) TMI 13 - BOMBAY HIGH COURT - subsidy in the matter of serving food to workers by making use of outdoor catering service was held to be immaterial insofar as the manufacturer s claim of CENVAT credit on the service was concerned - the appellant directed to pre-deposit an amount of Rupees One lakh as pre-deposit upon such submission rest of the duty to be stayed till the disposal Partial stay granted.

Summary

Issues:
1. Denial of CENVAT credit for outdoor catering services.
2. Interpretation of entitlement to CENVAT credit.
3. Plea of limitation based on Tribunal decisions.
4. Requirement of pre-deposit for waiver and stay.

Analysis:
1. The appellant filed applications seeking waiver and stay regarding the denied CENVAT credits for two periods. The denial was based on the premise that the appellant could only claim credit for 50% of the service tax on charges paid to the canteen contractor for providing food to workers. The Revenue argued that the credit should be restricted to the cost of service incurred by the appellant. The appellant, however, claimed entitlement to credit on the entire service tax amount. The Tribunal noted conflicting decisions, including Commissioner vs. Ultratech Cement Ltd. and Commissioner vs. GTC Industries Ltd., where the latter's decision was overruled by the High Court. The appellant pleaded limitation against the demand for the first period, citing Tribunal decisions supporting their claim. However, the Tribunal highlighted the lack of evidence regarding the periodic filing of returns by the appellant.

2. Considering the circumstances, the Tribunal directed the appellant to pre-deposit a specific amount and report compliance within a set timeframe. The pre-deposit was a condition for waiver and stay of the remaining dues. The decision was made based on the totality of facts and circumstances presented during the proceedings. The Tribunal emphasized the importance of compliance with the pre-deposit requirement for the grant of waiver and stay for the balance dues.

This comprehensive analysis covers the issues of denial of CENVAT credit, interpretation of entitlement, plea of limitation, and the requirement of pre-deposit for waiver and stay as addressed in the judgment delivered by the Appellate Tribunal CESTAT BANGALORE.