2009 (7) TMI 449 - AT - Service Tax

Lower authorities denied CENVAT credit to the appellant in respect of (a) outdoor catering service; (b) repairs and maintenance of guest house and garden; and (c) security service provided to a Director of the company at his residential bungalow, for the period April, 2005 to January, 2007 and also imposed equal amount of penalty on the party under Section 11AC Appellant relying on Millipore India Ltd. v. Commissioner of Central Excise, Bangalore II 2009 - TMI - 32592 - CESTAT, BANGALORE in respect of factory garden maintenance and repairs, where credit held as admissible on landscaping of factory garden Revenue pointing to contra decision in 2009 (241) E.L.T. 474 (Tribunal) - Prima facie case not made out Regarding security service provided to a Director, agreement not produced to indicate nexus of service with manufacture or clearance of final products - Prima facie case not made out in the respect also Regarding outdoor catering service for supply of food in factory canteen appellant has made out a prima facie case on the strength of Tribunal s Larger Bench decision in Commissioner v. GTC Industries Ltd. 2008 - TMI - 31592 - CESTAT MUMBAI wherein it was held that credit admissible irrespective of who incurred cost of supply of food in canteen hence stay is granted partly

Summary

Issues: Denial of CENVAT credit for outdoor catering service, repairs and maintenance of guest house and garden, and security service provided to a Director.

Outdoor Catering Service and Repairs/Maintenance of Guest House and Garden:
The appellant was denied CENVAT credit for outdoor catering service, repairs, and maintenance of the guest house and garden. The counsel argued for waiver based on a previous Tribunal order but was countered by conflicting decisions. The Tribunal found no merit in the appellant's case regarding garden maintenance service, citing a previous decision denying CENVAT credit for a similar service. The appellant's attempt to draw parallels with other cases where credit was allowed on different services was rejected. However, the Tribunal allowed CENVAT credit for outdoor catering service based on a Larger Bench decision, emphasizing that the source of funding for food supply did not affect credit eligibility.

Security Service Provided to Director:
Regarding security services provided to the Director at his residential bungalow, the appellant claimed these services should be considered 'input services' due to the company office located there. However, lacking evidence to support this claim, the Tribunal referred to a previous case where CENVAT credit was denied for security services due to the absence of a relevant agreement. As no similar agreement was presented in the current case, the Tribunal held that the appellant failed to establish a prima facie case for claiming credit on security services.

Final Decision and Compliance:
The Tribunal granted waiver and stay of recovery for a portion of the denied credit amount but required the appellant to deposit the remaining sum within a specified period. Compliance with this directive would result in a waiver of pre-deposit and stay of recovery for the penalty amount as well.

This detailed analysis of the judgment highlights the arguments presented, legal precedents cited, and the Tribunal's reasoning for each issue involved in the denial of CENVAT credit to the appellant.