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2021 (5) TMI 880 - HC - Central ExciseCENVAT Credit - input services - services received by the appellant in the capacity of employer for providing food and beverages in the canteen maintained and run in the factory as per the mandate of Section 46 of the Factories Act, 1948 - HELD THAT - In the present case the undisputed facts reveal that the orders passed by the authorities, appellate authority and the Tribunal are based upon the amendment which came into force from 1.4.2011 - The undisputed facts make it very clear that the period involved in the present appeal is admittedly of post 2011 period and after the amendment to the provisions of Rule 2(l) defining the input service and the amendment to the provision of Rule 2(l) defining the input service came into effect w.e.f., 1.4.2011. The definition of input service post amendment contains exclusion clause and exclusion clause was effected w.e.f., 1.4.2011. Clause (c) of the said exclusion clause specifically excludes the services provided in relation to outdoor catering services. It is certainly not in dispute that said services prior to 1.4.2011 have been held to be covered by the definition of input service , however, after the amendment came into force in the light of specific exclusion clause, outdoor catering service is not at all covered under the definition of input service . A Taxing Statute has to be interpreted in the light of what is clearly expressed, it cannot imply anything which is not expressed, it cannot merge provisions in the statute so as to supply any assumed deficiencies - Appeal dismissed.
Issues Involved:
1. Eligibility of Cenvat Credit for outdoor catering services post-amendment to Rule 2(l) of the Cenvat Credit Rules, 2004. 2. Interpretation of statutory provisions under the Factories Act, 1948 and their impact on Cenvat Credit eligibility. 3. Applicability of precedents and judgments in the context of pre and post-amendment scenarios. Issue-wise Detailed Analysis: 1. Eligibility of Cenvat Credit for Outdoor Catering Services Post-Amendment: The core issue pertains to whether the services received by the appellant for providing food and beverages in the factory canteen, mandated under Section 46 of the Factories Act, 1948, qualify as 'input services' eligible for Cenvat Credit under Rule 2(l) of the Cenvat Credit Rules, 2004, post the amendment effective from 1.4.2011. The amendment introduced an exclusion clause specifically disqualifying 'outdoor catering' services from being considered as 'input services'. The court noted that prior to the amendment, such services were covered under 'input services', but post-amendment, they are explicitly excluded. Thus, the Tribunal's decision to deny Cenvat Credit for outdoor catering services post-amendment was upheld. 2. Interpretation of Statutory Provisions under the Factories Act, 1948: The appellant argued that the statutory obligation to maintain a canteen under the Factories Act, 1948, should entitle them to Cenvat Credit for related expenses. The court acknowledged the mandatory nature of establishing a canteen under Section 46 of the Factories Act but emphasized that the exclusion clause in the amended Rule 2(l) of the Cenvat Credit Rules, 2004, is clear and unambiguous. The court held that despite the statutory obligation, the expenses for canteen services primarily for personal use or consumption of employees do not qualify for Cenvat Credit post-amendment. 3. Applicability of Precedents and Judgments: The appellant cited several judgments to support their claim for Cenvat Credit. However, the court distinguished these cases based on the period they covered, noting that most judgments pertained to the pre-amendment era. For instance, judgments in the cases of Ganeshan Builders Ltd., Stanzen Toyotetsu India (P) Ltd., Resil Chemicals Pvt. Ltd., and Solaris Chemtech Ltd., were found inapplicable as they addressed the pre-amendment definition of 'input service'. The court reiterated that post-amendment, the statutory definition explicitly excludes outdoor catering services, making these precedents irrelevant to the present case. Conclusion: The court concluded that the statutory definition of 'input service' post-amendment clearly excludes outdoor catering services, and thus, the appellant is not entitled to Cenvat Credit for such services. The appeal was dismissed, affirming the Tribunal's decision. The court emphasized the principle of strict construction of taxing statutes, stating that no words can be added or implied in the statutory provisions. The question of law was answered in favor of the revenue, and the connected appeal was also dismissed. No orders as to costs were made.
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