2009 (1) TMI 188 - AT - Service Tax

Input Service Cenvat Credit on canteen services and bus sevcice Cenvat Credit availed in respect of service tax paid on catering services of canteen working in the factory to give foods and sacks to the employees and bus service was used to transport of employees to and fro from the factory Credit is allowed being eligible input services.

Summary

Issues:
1. Eligibility for CENVAT Credit of service tax paid on catering service.
2. Eligibility for CENVAT Credit of service tax paid on bus services received.

Analysis:
1. The first issue to be decided in this appeal was whether the respondents are eligible for CENVAT Credit of service tax paid on catering service. The catering services in question were provided for the canteen in the factory to offer food and snacks to the employees. The learned advocate for the respondents referred to the Larger Bench decision in the case of M/s. GTC Industrial Ltd. where it was held that service tax paid on outdoor catering services by the manufacturer for operating the canteen is considered an input service related to the business, making CENVAT credit admissible. Additionally, a decision of the Tribunal in the case of M/s. Mundhra Port and Special Economic Zone Ltd. was cited to support the contention that credit is admissible for bus services. The Tribunal had ruled that rent-a-cab services used for transporting officers for office work are considered an input service for CENVAT, and the learned advocate argued that bus services fall under the same category. The learned DR also acknowledged that the issues were covered by the judgments cited by the advocate for the respondents. Consequently, the appeal filed by the revenue was rejected.

2. The second issue in this appeal was the eligibility for CENVAT Credit of service tax paid on bus services received by the respondents. The learned advocate for the respondents relied on the decision in the case of M/s. Mundhra Port and Special Economic Zone Ltd. to argue that credit for bus services is admissible as they are akin to rent-a-cab services used for transporting officers for office work, which the Tribunal had deemed as an input service for CENVAT. The learned DR agreed that the issues were covered by the judgments cited by the advocate for the respondents. As a result of the discussion and agreement on the applicability of the cited judgments, the appeal filed by the revenue was rejected.