2019 (1) TMI 2033 - AT - Central Excise

CENVAT Credit of service tax paid - input services - Outdoor Catering Services availed by them for their employees for the period post 1st April, 2011 - HELD THAT - The Cenvat Credit of Service Tax on Outdoor Catering Services is not available to the appellant and as such, denial of the same is upheld. However, in as much as the issue was interpretational and there were decisions in favour of the assessee prior to the Larger Bench decision in the case of M/S. WIPRO LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE BANGALORE-III. 2018 (4) TMI 149 - CESTAT BANGALORE - LB as also in their case reported as M/s Hindustan Coca-Cola Beverages Pvt. Ltd. 2018 (9) TMI 1117 - CESTAT CHENNAI , there are no justification for imposition of penalty upon them. As such, the same is set aside and appeal is disposed of accordingly.

Summary

Issues Involved:
Whether the appellant is entitled to avail the Cenvat Credit of Service Tax paid on Outdoor Catering Services post 1st April, 2011.

Analysis:
The judgment by the Appellate Tribunal CESTAT ALLAHABAD, delivered by Hon’ble Mrs. Archana Wadhwa and Hon’ble Mr. Anil G. Shakkarwar, addressed the issue of Cenvat Credit of Service Tax on Outdoor Catering Services post 1st April, 2011. The appellant, represented by Shri Mrinal Bharat Ram, sought to avail the credit based on earlier decisions in their favor. However, it was noted that a Larger Bench decision held that Outdoor Catering does not qualify as an 'input service' after 01/04/2011. The Tribunal, in line with this decision, had also denied credit in previous cases. The Advocate for the appellant acknowledged this position. The Appellate Tribunal concurred with the denial of Cenvat Credit for Outdoor Catering Services post 1st April, 2011, based on the precedents set by the Larger Bench and subsequent Tribunal decisions.

The judgment highlighted that while the denial of Cenvat Credit was upheld, the imposition of a penalty on the appellant was deemed unjustified. The issue was considered interpretational, and given the existence of prior decisions favoring the assessee, the Tribunal found no grounds for penalizing them. Therefore, the penalty was set aside, and the appeal was disposed of accordingly. The decision emphasized the importance of considering the interpretational nature of the issue and the existence of precedents in determining the imposition of penalties in such cases.