2015 (2) TMI 874 - AT - Central Excise

Denial of CENVAT Credit - Outdoor Catering service - Renting of immovable property - Held that - in an inter partes order dated 23.04.2014 (2015 (2) TMI 479 - CESTAT NEW DELHI) the cenvat credit on outdoor catering services in identical circumstances though for a previous period had been permitted. I am not inclined to not follow the precedent of the said CESTAT order in the assessee s own case and therefore do not feel it necessary to indulge in a discussion on this issue. As regards the credit pertaining to renting of immovable properties, there is no doubt that the rent has been paid to install their towers which are used for boosting their signals to provide output services. Therefore, it is evident that the premises have been rented for the purpose of providing their out-put service and thus the renting of immovable property has a clear nexus thereto - Decided in favour of assessee.

Summary

Issues: Denial of Cenvat credit for outdoor catering service and rent on immovable properties due to lack of nexus with output services.

1. Cenvat Credit for Outdoor Catering Service:
The appellant was denied Cenvat credit amounting to Rs. 1,51,759 for outdoor catering service, contending that it lacked nexus with their output services. The advocate argued that a previous order in their favor for a similar circumstance supported their claim. The advocate highlighted that the outdoor catering service credit had been allowed in a previous period, and the current denial was for a subsequent period. The advocate also emphasized that the renting of immovable property was directly related to their output service. The advocate presented various citations supporting the admissibility of credit for outdoor catering services, while the respondent referred to a judgment stating otherwise.

2. Rent on Immovable Properties:
Regarding the denial of Cenvat credit amounting to Rs. 42,724 for rent on immovable properties, the advocate explained that the rented place was utilized to install towers for signal boosting, directly linked to providing output services. The judge acknowledged that the rent was paid for installing towers used to enhance signal strength for output services, establishing a clear nexus between renting immovable property and providing output services. The judge, considering the submissions from both sides, concluded that the renting of immovable property was directly related to the appellant's output services and allowed the appeal.

In summary, the appellate tribunal allowed the appellant's appeal, granting Cenvat credit for both outdoor catering service and rent on immovable properties by establishing a clear nexus between the services and the output services provided by the appellant. The decision was based on the precedent set in a previous order favoring the appellant and the direct relationship between renting immovable property for tower installation and providing output services.