2015 (9) TMI 1095 - AT - Service Tax

Admissibility of CENVAT Credit - canteen/catering services - Held that - Appellant had produced a Chartered Accountant s certificate from the competent authority and claimed that no cost of food recovered from its employees, then the same cannot be brushed aside by the Revenue on a presumption without taking any alternative opinion from an expert that such a cost has been recovered from its employees. No documentary evidence has been brought on record by the Revenue that some portion of the cost of food supplied by the Appellant is recovered from the employees. In the present factual matrix, the case law of Hon ble Mumbai High Court in the case of CCE Nagpur Vs Ultratech Cement Ltd (2010 (10) TMI 13 - BOMBAY HIGH COURT) is not applicable as there is no evidence on record that any amount is recovered by the Appellant from its employees towards the cost of food. Accordingly, it is held that the entire Service Tax credit is admissible to the Appellant and the order passed by the First Appellate Authority is required to be set aside. - Decided in favour of assessee.

Summary

Issues:
Admissibility of CENVAT Credit on catering/canteen services availed by the Appellant.

Analysis:
The appeals were filed by the Appellant concerning the admissibility of CENVAT Credit on catering/canteen services. The Appellant's representative argued that the entire cost of services was incurred by the Appellant, making the entire Service Tax credit admissible. They referenced a certificate from a Chartered Accountant to support their claim that canteen expenses were included in the employee cost forming part of production cost. The Adjudicating authority had dropped proceedings under a show cause notice based on this certificate. The Revenue's representative contended that a nominal portion of food cost was recovered from employees, citing a High Court order requiring the reversal of proportionate credit.

Upon hearing both sides and examining the case records, the Tribunal noted that the issue of CENVAT Credit on canteen/catering services had been settled by a High Court judgment. The matter had been remanded to verify the Appellant's claim based on the Chartered Accountant's certificate, which stated no amount was recovered from employees. The Adjudicating authority accepted this certificate and dropped proceedings. The Tribunal emphasized that the Revenue's argument of nominal cost recovery was baseless and lacked evidence. As the Appellant provided a certificate claiming no cost recovery from employees, the Tribunal held that the entire Service Tax credit was admissible, setting aside the First Appellate Authority's order.

In conclusion, the Tribunal allowed the appeals filed by the Appellant, granting consequential relief. The decision was based on the lack of evidence supporting the Revenue's claim of cost recovery from employees, as affirmed by the Chartered Accountant's certificate.