2016 (5) TMI 1077 - AT - Service Tax

Entitlement to the credit of service tax paid on Outdoor Catering Services and Staff Transport Services - Held that - Since both the services on which cenvat credit has been denied by the impugned order are held to be input services by decisions of various High Courts, therefore in view of the settled position of law both the services i.e. Outdoor Catering service as well as Staff Transport Service fall in the definition of input service and the credit taken by the appellant has wrongly been denied by the respondent. See CCE Vs. Ultratech Cement Ltd 2010 (10) TMI 13 - BOMBAY HIGH COURT

Summary

Issues:
Denial of cenvat credit on Outdoor Catering Services and Staff Transportation Services.

Analysis:

1. Background: The appeal was filed against the Commissioner (Appeal)'s order denying cenvat credit on Outdoor Catering Services and Staff Transportation Services, which was upheld by the order-in-original. The appellant, a manufacturer of "Rotogravure Printing Cylinders," availed cenvat credit on various services, including catering and staff bus transport.

2. Contentions: The appellant argued that both Outdoor Catering Services and Staff Bus Services qualify as input services under the Cenvat Credit Rules 2004. They cited multiple judgments from different benches of the Tribunal and High Courts supporting their claim. The appellant emphasized that the services were directly related to their business activities and should be eligible for cenvat credit.

3. Legal Analysis: The definition of "input service" under Rule 2(l) of the Cenvat Credit Rules 2004 was crucial in determining the eligibility of the services for cenvat credit. The Bombay High Court and the Karnataka High Court had previously addressed similar issues and concluded that services like Outdoor Catering and Staff Transport could be considered input services under certain conditions.

4. Judicial Precedents: Various High Courts, including Karnataka, Gujarat, and Allahabad, had ruled in favor of considering Outdoor Catering Services and Staff Transport Services as input services based on statutory obligations and business necessities. The judgments highlighted that these services were essential for the manufacturing process and, therefore, fell within the ambit of "input service."

5. Decision: Considering the precedents and the definition of "input service," the Tribunal concluded that both Outdoor Catering Service and Staff Transport Service qualified as input services. The denial of cenvat credit by the respondent was deemed incorrect, and the impugned order was set aside, allowing the appeal of the appellant with any consequential relief.

In conclusion, the Tribunal's judgment clarified the eligibility of Outdoor Catering Services and Staff Transportation Services for cenvat credit, emphasizing their importance in the manufacturing process and aligning with previous legal interpretations.