2014 (4) TMI 795 - AT - Central Excise

Availment of CENVAT Credit - Whether, for the period of dispute, CENVAT credit on outdoor catering service was admissible to the appellant - Held that - it appears that a manufacturer of excisable goods can claim CENVAT credit on outdoor catering service for any period prior to 1.4.2011 (the date on which this benefit was forbidden) where he employed more than 250 workers in his factory and did not recover any part of the cost of the services from his employees. Accordingly, there will be waiver of predeposit and stay of recovery in respect of the adjudged dues - Stay granted.

Summary

Issues involved: Admissibility of CENVAT credit on outdoor catering service for the period between April 2007 and March 2011.

Analysis:
1. The issue in this case revolves around the admissibility of CENVAT credit on outdoor catering service for a specific period. The appellant, a manufacturer of excisable goods, utilized outdoor catering services to provide subsidized food to their employees during the said period. The appellant claimed CENVAT credit only for the actual cost incurred by them for the services. The Tribunal found a prima facie case in favor of the appellant based on the facts presented. Additionally, the Tribunal referred to several decisions, including Commissioner Vs Ferromatik Milacron India Ltd. and Commissioner Vs Ultratech Cement Ltd., which supported the appellant's position.

2. The Joint Commissioner (AR) argued against the appellant's claim, citing that the Allahabad High Court had admitted the department's appeal in a different case, Samsung Electronic (I) Pvt. Ltd. Vs Commissioner, where the decision was against the Revenue on the same issue. However, the decisions cited by the appellant's counsel were all in favor of the appellant on the issue at hand. It was noted that none of these decisions had been stayed by the apex court.

3. Based on the arguments presented, the Tribunal concluded that a manufacturer of excisable goods could claim CENVAT credit on outdoor catering services for any period before April 1, 2011, provided they employed more than 250 workers in their factory and did not pass on the cost of the services to their employees. As a result, the Tribunal ordered a waiver of predeposit and a stay of recovery for the adjudged dues in this case.

In summary, the judgment by the Appellate Tribunal CESTAT Chennai favored the appellant's claim for admissibility of CENVAT credit on outdoor catering services for the period in question, based on the specific circumstances and legal precedents cited during the proceedings.