2018 (6) TMI 473 - AT - Central Excise

CENVAT credit - input services - Outdoor Catering Services which were used for providing canteen facility within the factory premises for the employees - period involved is prior to 1.4.2011 - Held that - The period involved is prior to 1.4.2011 when the definition of input services had wide ambit as it included various services involving various activities related to business - relying in the decision in the case of CCE Chennai Vs Bharat Heavy Electricals Ltd. 2016 (3) TMI 441 - MADRAS HIGH COURT where the credit was allowed in similar situation. However it is noted that the appellants have received part of the contribution from the employees for providing outdoor catering services. Service tax credit to that portion which has been received from the employees is not eligible and therefore it requires to be quantified as to the quantum of credit appellant is eligible. Matter remanded for the limited purpose of re-quantification of eligible credit - appeal allowed by way of remand.

Summary

Issues: Disallowance of credit on outdoor catering services

Analysis:
The appellants contested the disallowance of credit on outdoor catering services, arguing that they availed service tax credit for providing canteen facilities within the factory premises as mandated by the Factories Act, 1948. The appellant's counsel emphasized the integral connection of these services with the manufacture of final products and requested a remand for quantifying the eligible credit. The counsel cited precedents such as CCE Nagpur Vs Ultratech Cement Ltd. and CCE Chennai Vs Bharat Heavy Electricals Ltd. to support their argument. The respondent's representative reiterated the findings of the impugned order.

The tribunal considered the period before 1.4.2011 when the definition of 'input services' had a broader scope encompassing various business-related activities. Relying on the precedents cited by the appellant's counsel, the tribunal held that the appellants were entitled to service tax credit for outdoor catering services. However, the tribunal noted that the appellants had received contributions from employees for these services, making that portion ineligible for credit. Consequently, the tribunal remanded the matter to re-quantify the eligible credit, setting aside the impugned order and allowing the appeal for the limited purpose of re-quantification by the adjudicating authority. The judgment was dictated and pronounced in court by the tribunal.