2019 (9) TMI 747 - AT - Central Excise

CENVAT Credit - input services - outdoor catering services availed at the factory - HELD THAT - On perusal of the Larger Bench decision in the case of M/S. WIPRO LTD. VERSUS THE COMMISSIONER OF CENTRAL EXCISE BANGALORE-III. 2018 (4) TMI 149 - CESTAT BANGALORE , it is observed that credit has been held to be not available on outdoor catering on the ground that food is always for personal consumption - In the present facts of case, it cannot be said that the facility obtained for catering services is for a particular employee or group of employees but for all the employees working in the factory which is located in a remote location, the fact which is not in dispute. Hon ble Madras High Court in its decision dated 31.08.2017 in the case of COMMISSIONER OF CENTRAL EXCISE, COIMBATORE VERSUS M/S. PRICOL, UNIT-I, COIMBATORE AND THE CUSTOMS, EXCISE SERVICE TAX APPELLATE TRIBUNAL, CHENNAI 2017 (8) TMI 1467 - MADRAS HIGH COURT while following the Hon ble Bombay High Court s decision in case of CCE, NAGPUR VERSUS ULTRATECH CEMENT LTD., 2010 (10) TMI 13 - BOMBAY HIGH COURT has held that the use of outdoor catering services in the factory has a nexus and integrally connected with the manufacture of final products and hence eligible for credit. The appellant is entitled to avail Cenvat credit on outdoor catering - appeal allowed - decided in favor of appellant.

Summary

Issues:
Entitlement to Cenvat credit on outdoor catering services availed at the factory.

Analysis:
The appeal was filed against the order denying Cenvat Credit on outdoor catering services availed by the assessee in their factory. The appellant argued that catering services were essential for ensuring adequate working conditions for all workers in the factory, not for personal consumption. The amended definition of 'input service' was cited to support the claim, along with various judgments where credit was allowed in similar cases. The Revenue, however, referred to a Larger Bench decision holding that Cenvat credit on outdoor catering is not available post the amended definition. The Tribunal noted that the facility was for all employees, not a specific group, and cited precedents supporting the admissibility of credit in such cases.

The Tribunal observed that the High Court had upheld the entitlement of Cenvat credit on outdoor catering, which was not considered by the Larger Bench in the Wipro case. It was emphasized that the decision of the High Court would have a binding precedence over the Tribunal's decision. Citing a similar precedent, the Tribunal highlighted the importance of following High Court rulings over contrary Tribunal decisions. Additionally, the Madras High Court and Gujarat High Court decisions were referenced to support the eligibility of outdoor catering services for credit due to their integral connection with the manufacture of final products.

In conclusion, considering the legal positions discussed and the precedents cited, the Tribunal held that the appellant was entitled to avail Cenvat credit on outdoor catering services. The demand was deemed unsustainable, and the appeal was allowed with consequential relief.