2008 (5) TMI 226 - AT - Service Tax

Credit in respect of the Service tax paid on outdoor catering service in the factory - applicants are engaged in the manufacture of steel and steel products - In view of the above definition of input service we find that as the out-door catering service prima facie cannot be considered as input service therefore we find it is not a fit case for total waiver of demand stay not granted completely

Summary

Issues:
1. Application for waiver of pre-deposit of duty and penalties.
2. Admissibility of Cenvat credit on service tax paid for outdoor catering service in a factory.
3. Interpretation of "input service" under the law.
4. Decision based on conflicting tribunal judgments.

Analysis:

1. The judgment pertains to an application for the waiver of pre-deposit of duty and penalties amounting to Rs. 2,07,557.00. The demand arose due to the denial of credit for service tax paid on outdoor catering service in a factory where the applicants are engaged in manufacturing steel and steel products.

2. The revenue contended that the Cenvat credit for service tax on outdoor catering service is not admissible as it does not relate to the business activities of the applicants. They relied on a decision in a similar case to support their argument. However, the applicants cited a different tribunal decision where the credit for service tax on outdoor catering was allowed.

3. The tribunal analyzed the definition of "input service" under the law, which includes services used in relation to various business activities such as accounting, auditing, marketing, and transportation. The tribunal concluded that outdoor catering service does not fall within the definition of input service, making it ineligible for total waiver of the demand.

4. Given the conflicting decisions by different tribunal benches, the tribunal directed the applicants to deposit Rs. one lakh within four weeks. Upon compliance with this directive, the pre-deposit of the remaining duty and penalties would be waived. The applicants were required to report their compliance by a specified date.

This detailed analysis highlights the key issues addressed in the judgment, including the interpretation of relevant legal provisions and the resolution of conflicting tribunal decisions.