2009 (6) TMI 459 - AT - Service Tax

Outdoor Catering Services- supply of foods to its factory employee- whether Cenvat Credit on outdoor catering service received by the appellant and utilized for supply of food to the factory employees is admissible? In the light of the decision of CCE v. GTC Industries Ltd 2008 -TMI - 31592 - CESTAT MUMBAI, in which held that credit is allowed if certain requirements are fulfilled, Tribunal set-aside the orders of the lower authority and allow this appeal by way of remand back.

Summary

Issues: Admissibility of CENVAT credit on outdoor catering service for supply of food to factory employees under rule 2(1) of Cenvat Credit Rules, 2004.

Analysis:
1. The appeal revolves around the admissibility of CENVAT credit on outdoor catering services utilized for supplying food to factory employees by the appellant. The core issue is whether this credit is permissible under rule 2(1) of the Cenvat Credit Rules, 2004.

2. The Tribunal had previously allowed this benefit to the appellant in a similar case, subject to certain conditions, following the decision in CCE v. GTC Industries Ltd. However, in the current appeal, the original authority needed to verify if the requirements were met by the assessee.

3. The Tribunal referred to the Larger Bench decision in GTC Industries case, emphasizing that for a factory with over 250 workers manufacturing excisable goods, the outdoor catering services used in the factory-canteen for providing food to workers were considered part of the cost of production of excisable goods.

4. Notably, the Tribunal highlighted the absence of specific information regarding the number of workers in the factory and whether the cost of food supplied in the factory-canteen was included in the assessable value of excisable goods during the relevant period. As a result, the case was remanded to the original authority for a fresh adjudication.

5. Consequently, the Tribunal set aside the orders of the lower authorities and allowed the appeal by remanding the case to the original authority for a reevaluation. The original authority was instructed to conduct a thorough examination, considering the precedents and giving the assessee a fair opportunity to present their case.

This detailed analysis of the judgment addresses the issues surrounding the admissibility of CENVAT credit on outdoor catering services for the supply of food to factory employees, providing a comprehensive overview of the Tribunal's decision and the legal considerations involved.