2015 (10) TMI 2223 - AT - Service Tax

Denial of CENVAT Credit - Outdoor catering service - held that - The dispute in this case relates to September, 2010 to August, 2011. It is submitted on behalf of the Counsel that the respondent debited the amount availed after 1.4.2011. In a catena of decisions, outdoor catering service has been held to be qualified as input service for availing credit. The arguments advanced by the learned AR that the respondents have not stated in the reply that the expenses for outdoor catering services was borne by them and that it was not recovered from the employees does not find force for the reason that there is no such allegation raised in the show cause notice. Therefore, the arguments advanced raised by the learned AR deserves to be brushed aside. - No material irregularity to interfere with the impugned order. - Decided against Revenue.

Summary

Issues:
- Challenge to allowance of credit on outdoor catering services
- Whether outdoor catering services qualify as input service for availing credit

Analysis:
- The appeal was filed by the Revenue challenging an order allowing credit on outdoor catering services availed by a company engaged in manufacturing motor vehicle parts and IC engine parts. The initial proceedings disallowed the credit and imposed penalties, which were later overturned by the Commissioner (Appeals) in favor of the respondents.
- The main contention revolved around whether outdoor catering services qualified as input services for availing credit. The learned AR argued that the company failed to clarify if the expenses for catering were borne by them or recovered from employees. However, the Counsel for the respondents pointed out that the show cause notice did not raise this specific allegation, focusing solely on the qualification of outdoor catering services as input services.
- The Commissioner (Appeals) relied on a decision by the Hon'ble Bombay High Court to rule in favor of the respondents, stating that credit on outdoor catering services was admissible for the period in question. The Tribunal noted that various precedents supported the classification of outdoor catering services as input services for credit purposes.
- After hearing the arguments and reviewing the orders, the Tribunal found no irregularities to warrant interference with the decision. Consequently, the appeals by the Revenue were dismissed, and the cross objections by the respondents were also rejected.