2017 (4) TMI 24 - AT - Central Excise

CENVAT credit - outdoor catering service (canteen service) - the demand notices were issued to the appellant alleging that approximately 50% of the value of the said service has been recovered from their employees in providing the outdoor catering service (canteen service) - The contention of the Advocate for the appellants on the other hand is that the canteen service has been provided free of cost to their employees by distributing food coupons. The appellant had not recovered any amount from their employees in providing outdoor catering service (canteen service) - Held that - such categorical claim of the appellant needs to be scrutinized on the basis of evidences on record and the evidences that would be placed by the appellants before the adjudicating authority - appeal allowed by way of remand.

Summary

Issues:
1. Admissibility of CENVAT credit on outdoor catering service.
2. Recovery of amount from employees for outdoor catering service.
3. Remand to Adjudicating authority for verification of facts.

Analysis:
1. The main issue in this case was the admissibility of CENVAT credit on outdoor catering service provided by the appellant to their employees. The appellant had availed CENVAT credit during the period 2008-09 to 2010-11, which was challenged by the Revenue. The appellant argued that the CENVAT credit should be admissible based on judgments of the Hon'ble Bombay High Court and Hon'ble Gujarat High Court. The Tribunal, per Dr. D.M. Misra, held that the CENVAT credit of the service tax paid on outdoor catering service is eligible based on the decision of the Hon'ble Gujarat High Court. However, the issue of recovery of 50% of the service value from employees needed further scrutiny.

2. The second issue revolved around the contention that the appellant had not recovered any amount from their employees for providing the outdoor catering service. The appellant claimed that the canteen service was provided free of cost to employees through food coupons. The Tribunal acknowledged this claim but emphasized the need for scrutinizing the evidence on record and evidence that would be presented before the adjudicating authority. The matter was remitted to the Adjudicating authority for verification of facts regarding the alleged recovery from employees, indicating a need for a detailed examination of the evidence.

3. Lastly, the Tribunal decided to remand the case to the Adjudicating authority for the limited purpose of verifying the claim made by the appellant regarding the absence of recovery from employees for the outdoor catering service. The decision to remand the case highlighted the importance of thoroughly examining the evidence and ensuring that the facts are accurately determined before reaching a final decision. The appeals were allowed by way of remand, emphasizing the need for a detailed verification process to establish the veracity of the appellant's claim.