2018 (2) TMI 789 - AT - Central Excise

CENVAT credit - Outdoor Catering Services - Held that - there is no dispute the Outdoor Catering Services is exclusively used for the employee of the company - Outdoor Catering Services for personal use, accordingly clearly get covered under the exclusion provided under the Clause (C) - credit not allowed - appeal dismissed - decided against appellant.

Summary

Issues Involved:
Admissibility of CENVAT credit for "Outdoor Catering Services"

Comprehensive Analysis:

Issue 1: Admissibility of CENVAT credit for "Outdoor Catering Services"

The main issue in this case is whether the CENVAT credit paid for "Outdoor Catering Services" is admissible to the appellant. The appellant argues that the credit should be allowed because the expenses for catering services are borne by them and the services are provided to employees as a necessity for running the production, citing relevant judgments. On the other hand, the Revenue contends that "Outdoor Catering Services" are exclusively provided for personal use and consumption by employees, thus falling under the exclusion Clause (C) of Rule 2(l) of CENVAT Credit Rule, 2004.

Upon careful consideration of both arguments and a review of the records, it is observed that the exclusion Clause (C) clearly states that services like "Outdoor Catering Services" are excluded when used primarily for personal use or consumption by any employee. In this case, the catering services provided by the appellant are exclusively meant for the use of their employees, making them fall under the exclusion. The fact that the cost of catering services is included in the company's expenses is deemed a secondary issue, as the primary consideration is whether the service falls under the definition of "input service." Even though the catering services may be a necessity for running the factory and statutorily required under the Factory Act, 1948, the exclusion of "Outdoor Catering Services" from the definition of input service renders them ineligible for CENVAT credit.

The judgments cited by the appellant, including the one from the Hon'ble Bombay High Court and the Tribunal, are found to be inapplicable to the present case due to different factual circumstances and the period involved. The Tribunal's decision was based on the interpretation that the service was not used for personal use or consumption by employees but by the company itself, unlike the situation in the present case where the catering services are exclusively used by the employees. Therefore, based on the discussions and analysis, it is concluded that the appellant is not eligible for CENVAT credit on "Outdoor Catering Services," and the impugned order upholding the same is affirmed, resulting in the dismissal of the appeal.

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