2018 (6) TMI 1407 - AT - Central Excise

CENVAT credit - input services - food provided to the workers outsourced by the appellant - whether or not the credit of service tax on outdoor catering services should be allowed in view of the statutory requirement under the Factories Act? - Held that - Tribunal being a creation of law has no power to amend enlarge restrict or otherwise modify the Act or Rules. This position does not change even if the appellant has an obligation under the Factories Act or any other law and Tribunal cannot enlarge the scope of CENVAT Credit Rules. The matter should be referred to Hon ble President for constituting a Larger Bench to resolve the issue - matter referred to Larger Bench.

Summary

Issues:
1. Credit of service tax on food subsidy provided to outsourced workers.
2. Whether credit on outdoor catering services should be allowed under the Factories Act.
3. Conflict in decisions regarding the availability of credit on outdoor catering services.

Analysis:
1. The case involves a dispute over the credit of service tax paid on the food subsidy provided to workers outsourced by the appellant. The appellant argues that the food subsidy is part of the charges paid to the manpower supplier and not outdoor catering for employees. The Revenue contends that the food subsidy amounts to outdoor catering services, thus ineligible for service tax credit due to specific exclusion in the Rules. The Tribunal notes that the workers are not regular employees of the appellant but work in the factory and enjoy subsidised food. The Tribunal directs the matter to be referred to a Larger Bench due to conflicting interpretations.

2. The appellant cites the case of Hindustan Coca Cola Beverages Pvt. Ltd., where credit on outdoor catering services was allowed as a statutory requirement. However, the department highlights conflicting decisions on this issue, leading to the reference of a similar case to a Larger Bench for resolution. The Tribunal emphasizes that it cannot modify the Act or Rules, even if there are statutory obligations under laws like the Factories Act. Given the referral of a similar case to a Larger Bench, the Tribunal decides to refer this case as well for resolution.

3. The Tribunal acknowledges the argument regarding the statutory requirement under the Factories Act for providing food but maintains that it cannot expand the scope of CENVAT Credit Rules. As the issue of credit on outdoor catering services is under scrutiny due to conflicting decisions, the Tribunal deems it appropriate to refer the matter to the Hon'ble President for the constitution of a Larger Bench to address the conflicts between different Benches' decisions. The order directs the Registry to present the case along with relevant laws for the constitution of a Larger Bench.